Financial Planning & Budgeting
Five Good Financial Habits to Establish in Your Twenties
- Priyanka Megotia / 05-Jan-2021
If there is one significant learning that most of us can take from COVID-19 pandemic and a challenging year like 2020, it has to be the importance of keeping our finances for the future in check!
Though we are all unsure about tomorrow, yet ironically, the most important thing is to take control of our future and stay prepared for what lies ahead tomorrow. Being financially stable and independent is important for a secured financial future.
Here we list out 5 things that you must exercise to keep your financial future on track:
Save More, Invest Early
Research has shown that those who plan to save more and build the habit to invest early and consistently; end up with more wealth than those who do not.
The earlier you invest, the more time you get to grow your wealth in value, therefore, it ensures that your goals do not become overly dependent on the success or failure of any investment and keep it in-line with your long-term financial goals.
Pay Your Debt Before You Invest
Living debt-free and investing for the future is both crucial and necessary. However, the idea behind the strategy of paying debt before investing is to avoid paying more than what you can gain.
A wise course of action would be to work on your portfolio and balance between your debts and investments. However, if you can earn a higher return on your investments than the interest on your debt, you should invest.
Get Your Life, Health and Motors Insured
Life is uncertain is known to all of us. Whether it is your life, health, motor or a property, insuring is one of the best financial decisions to take in life.
The right insurance protects you and your dependents against losses and helps you easily avoid financial jeopardy as it transfers the risks which may arise at any point of time in life.
Secure Your Retirement
Planning for your retirement offers peace of mind. Calculating the corpus you would need after retirement helps to create a judicious plan with funds and pensions in place. It can ward off any uncertainties and helps you stay secure after you retire.
Initiating retirement planning as early as possible ensures a reasonable amount of time to alter investments and review the financial plan and thus stay on top of your financial needs.
Write Your Will
Having a will arguably is one of the most important things you can do for yourself and your family.Writing a Will not only spells out your wishes regarding the distribution of your assets and care of your children in case of a dispute but also clearly defines what should happen to your estates inclusive of your money, possession and property after you die.
Looking Out for Reasons Still? Here is why!
Did you know? 3-5 years delay in investments can cost you 1 Crore!
Though we all know the importance of starting early, somehow we always find an excuse to delay our investment plans, but not anymore. Experts’ stats that a few years delay in making your first investment can cause a crore worth of harm to your financial status.
Experts, however, advise on starting early with small amounts at early as you start earning while you can keep increasing the investment amount at the later stages of your life for your long term goals.
Here is how early savings and investment is the key to wealth accumulation!
|Calculated at 10% Rate of Return|
|Investment Start Age (Years)||Retirement Age (Years)||Monthly Investment (Rs.)||Calculated at 10% Rate of Return||Calculated at 12% Rate of Return|