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5 Financial tips for young adults to make the most out of their monet

If you are a young adult at the cusp of your responsible life, no non-sense financial management is of great importance to you.

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Young adults in their late 20s and early 30s are the ones starting their lives. If you are a young adult at the cusp of your responsible life, no non-sense financial management is of great importance to you. While the millennial generation believes in living life as it comes, you must also start learning and applying ideas to accumulate wealth.

If you are a millennial, you must have come to face responsibilities like getting married, starting a family, etc. To realise your responsibilities and dreams, you need to be financially ready to not have to apply for loan because of the unavailability of funds.

Some of the trusted personal loan apps are available for use, but they must be your last resort.

Getting financially secure takes a lot of patience and guidance. So, to help you in getting financially independent, here is a list of 5 financial tips. Take control of your finances and build a solid financial future with these simple tips.

5 financial tips for you so that you make the most out of your money

1) Master your budget: Having a plan, a budget is the most critical first step you must take to reach your financial goals. To build a budget, estimate all your monthly income and expenses. Take a close look at places where you are spending your money. Optional expenses like dining out, online shopping, gym fees, etc., are not entirely essential.

2) Check your credit score: Checking your credit score is essential if you want to grow your assets. Credit Information Bureau Limited (CIBIL) maintains credit score in India. A good credit score can help you get low-interest rates on loans and credit cards if you have to apply for a loan. With a good CIBIL score, you can apply for an instant personal loan even with an Aadhar card. Regularly check your credit score to make sure there is no discrepancy.

3) Build an emergency fund: Emergencies can strike at any time to anyone. You may fall ill, lose your job, or your home may need immediate renovation. Just take the example of the Covid pandemic; it has disrupted the lives of everyone. An emergency can break the balance in your life and leave you helpless. And so, it is vital to build and grow an emergency fund. An emergency fund must be able to fulfill a minimum of 12 months of your living expenses, the probable time you need to survive a temporary financial hardship. You can build an emergency fund by divesting at least 10% of your monthly income in a high-yield savings account that can be easily liquidated in emergencies.

4) Avail tax benefits: You must not scamper around in the last month of the fiscal year to make lump sum investments to save taxes. That can be a good idea if it were a part of your financial plan, but if not, investing large sums of money anywhere on short notice hurts your financial plan. With a thought out strategy, you would not have to struggle to save taxes. There are certain sections in Income Tax Act that can keep you from paying hefty taxes. For instance, you are eligible to claim a tax deduction of Rs 1.5 lakh on your income under section 80C.

5) Save money for retirement and family future: You may be a millennial right now, but get that all millennials will grow together and get old. You got to prepare for old age by setting up a retirement fund. You can set a retirement time goal of, say, 15 years for your SIPs or mutual funds. With a more extended period of investments, your money grows uninterrupted and ensures that you retire with a handsome amount of liquid funds.

In conclusion

To achieve your financial goals, start budgeting and planning early. Become aware of the above and other financial tips that make sense to you and chalk out a financial plan that will help you and your family live a comfortable life in the present and also in the future. If required, you may take a loan from any of the trusted loan apps such as PaySense.

Disclaimer: This is a Featured article

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