Financial Tips for the young adults:
Hello Everyone! Today we shall discuss about some of the important financial tips that a young adult must know. Earning money is not a difficult talk, managing the money is the need of the hour. One should be able to channel the money to the right things in order to grow. I have pointed out some of these must know things, please sit back, relax and go through.
1. Retirement Planning: Earlier the things you start with, they are better. Start saving the money for the retirement now. A very small portion of the amount should go for this. This would compound in such a way that, you wouldn’t believe the magic of compounding. Invest in NPS fund, or any other pension funds little by little, but as said earlier, being consistent is the key.
2. Understanding monetary Tax rules: I have seen several young people not caring about the tax rules and deductions. Some of them are paying tax by not knowing how to save. This would be a point of regret in the later stages. And, some people go for CA, which is also not recommended. Though, filing tax through someone else is just fine, but not knowing the simple tax rules cannot be accepted. Read the basics of them, have a blueprint in your mind, as to how it works.
3. Insure yourself: Life is uncertain, things can happen to anyone, anytime. Get a health insurance and term insurance covering at least 20 times your annual earning. Young people often think that its a waste of money, as they are healthy then. But, its not just to you, to your family, who would at least not be pushed to the burden of EMI, expenses in case of an unprecedented death.
4. Sticking to the Budget: Budgeting is invariably the most disciplined way of saving money. You would clearly know where your money is going if you budget properly, it doesn’t matter how much you make, this is important to know.
5. Disciplined Debt Payment: A general mistake done by the adults is having multiple credit cards, and using all of them together blindly. Defaulting on payment on any of these even for a month for a 25 rupees recharge would bring your CIBIL score down, thereby affecting your credibility of being eligible to further loans. Do not take credit cards, because the bank is offering, take when you are able to manage it efficiently. Keep multiple reminders for the payment, do not miss a single one.
6. Careful planning of buying house/car: The two most important goals in any individuals life is having his/her own car and house. Some people are so gullible that they fall into the trap and take wrong decisions in hurry. I strongly recommend each and everyone to plan wisely before buying a house/car. A detailed article has been written on both of these, please have a read.
Financial planning while buying a home
Things to know before buying a car
7. Smart Investment: Saving a part of money is known to everyone, but where are you channeling it? Are you taking FDs? Are you investing in stock markets? Real estates? Gold bond? The answer i’d expect would be part in each. The point here is to diversify the investment. This brings down the risk associated with the investment.
Keep all these things in mind that would really help in a planned style of saving and investment, Feel free to ask any doubts in case.
Together!!