Best SIP Funds to Invest Online 

Financial Planning is likely the last thing on your mind in your early to mid-20s. Free of responsibilities and money worries, you probably live pay check to pay check, with little or no care for the future. However, as boring as it might sound, your 20s are actually the perfect time for you to lay the foundation for a secure financial future. While you needn't get obsessed with things like saving and planning (yet!), here are five simple things you can do, without compromising your lifestyle too much.

Take up a Health Insurance Plan
Your likelihood of getting hospitalized may be relatively small in your 20s, but there are several benefits of taking up a Health Insurance plan early on in your life. For one, your premiums will be a lot lower as insurers will view you as a low-risk case. Secondly, you'll likely accrue a sizeable quantum of no-claim bonuses over the years, that will accrue as a higher sum insured by the time you get married and have financial dependants, and the need for health insurance becomes more critical. Third, you'll save taxes under Section 80D.

Start a SIP
When it comes to your savings - well begun is half done. Starting a SIP in an equity oriented mutual fund, even with a small amount of money, can be a significant step towards ensuring a more secure financial future for two reasons. One, it puts you in the habit if spending less than you earn in a given month. Two, your saved money will have a lot of time to compound, resulting in long term wealth creation for you. Consider this - a monthly SIP of just Rs. 5,000 compounding at 14% CAGR (a distinct possibility in an aggressive mid cap fund), will grow to around 13 Lakhs in 10 years. Leave this money untouched for another 25 years, and it grows to more than 2.2 Crores in 25 years, assuming a 12% CAGR! Starting a SIP in an ELSS Fund can have the added benefit of putting your tax savings on auto-pilot.

Apply for a Credit Card
If you're wondering whether you heard it right - well, you did. Applying for a credit card in your 20s can actually have long term financial planning benefits for you. How so? By ensuring that you make your bill payments well in time, you'll establish a solid credit history and subsequently, build up a quality credit score with agencies such as CIBIL. Having a high CIBIL score can come in handy in your early to mid-thirties, when you may need to apply for loans for buying a home or a car. Although developments in FinTech are leading to AI led credit scoring models that do not require a credit history, it makes sense to start building one nevertheless. Make sure you keep your credit limit small and limit your spends to whatever you can pay off next month - or else the move will have a reverse impact!

Set Aspirational Financial Goals
Your 20s are a great time to set aspirational financial goals. While your 30s will likely be all about securing your family's future, your kid's education and bolstering your emergency funds, your 20s leave you with more mind space to plan for more aspirational goals - such as the purchase of a new car, a world tour, or a brand new electronic gadget. Aspirational goals can have a powerful "pull" effect that can in turn, increase your drive to excel in your career and earn more. Financial Planning doesn't have to be all boring, after all!