For those of you who have just started working, you are lucky. No financial responsibilities, no nagging spouse, no hungry children, little to no debt to clear, and what not. However, it’s easy to give in to temptation and spend money on gadgets, parties, traveling, etc. Moneymindz, India’s First Free Online Financial Advisory
You are lucky because you have the most valuable asset in the world with you, time. That’s right! This is the right time to start saving and investing money. Since you have time, the power of compounding will work well in your favor and earn you more returns.
The constant flow of income should be a reminder that it’s time for you to start saving and investing. It’s neither too early nor too late for anybody regardless of age, to save and invest. So, how do you get started? Moneymindz, India’s First Free On call Financial Advisory
1. Clear your outstanding loans
If you have a fixed income, then the first thing you have to do is to clear your debt, if any. Student debt or Education loan is what many people starting their careers have. At this age, most of you don’t have a home loan, car loan etc. If you have, work on clearing all that. In case you get the surplus amount, prepay the loan and close it.
A budget consists of your monthly income, expenditure, savings, investments, insurance, financial goals and time frame, all consolidated in one place. Maintaining a budget helps you track your expenses along with income and investments. Each month, add a part of your income to your savings and then use the remaining amount for expenditure so that you are disciplined in your savings.
3. Set goals and invest with care
Set your financial goals and divide them into short-term (<3 years), mid-term (3 to 5 years) and long-term (>5years) goals. Keep timeframe in mind. Invest accordingly. Invest separately for each goal. An Emergency Fund or a Contingency Fund is for emergencies like hospitalization, loss of employment, etc. Having a rainy day fund ensures your savings don’t get drained away during emergencies. An ideal Emergency fund should consist of 6 to 12 months of your income. The retirement fund is to provide you with income during your retired life. Rising inflation, reduction in joint families, more life expectancy, etc. are all signs that retirement planning is more important now than earlier. But never forget your risk appetite while investing.
4. Use excess income for investments
Salary hikes, bonuses, saved tax, interest from investments, rent, etc. need to be invested again so that you can get higher returns. This is to ensure you beat inflation. Keep inflation in mind always. Inflation is on the rise and doesn’t benefit any of us. Ensure you don’t run out of savings when you need them the most. Smart Financial Advisor, Kuber Mindz
For more information visit www.moneymindz.com or give a missed call to 022-62116588