Dear young people, while we all are together in this phase and learning a ‘new normal’, concern about money, stable finance and good health are here to stay! But, don’t worry, with right approach, we can manage money, investments and personal finance better.
I know, many of you have started your careers, many have got their dream jobs, many have founded their own start-ups. You were working hard to achieve your goals and had many plans in mind… but… suddenly COVID-19 came and life turned upside down.
This phase has changed our perspective to look at our life, the way we work and has got different insight about our personal finance.
When you have your eye on your future, you can better look at it with right approach about your money and finance.
So, here are some things to follow and inculcate in your habits, to make most of your personal finance and money-
- Please stay rooted:
When you get ‘financial independence’, you get many attractions to spend money on. Your wardrobe must have filled with many branded cloths and your room full of expensive items. All these, you might have purchased ‘just because’ your friends or colleagues have purchased them.
“lifestyle Inflation’ is highest among youth and above is one of the reasons behind it.
So, henceforth, ‘please stay rooted’. No need to buy anything ‘just to show-off to others’.
Don’t fall pray to credit card offers, loan offers and attractive discounts. Think well before buying anything. Buy only if you ‘need’ that item.
- Learn new skills:
All of you must have some or the other hobby or interest. Please learn more through it. You never know, your hobby can earn you money someday and you will get happiness as bonus!
Depending on single source of income is not a way ahead. We should understand this first.
Passive source of income can come from your hobbies! So work on it..
- Insure yourself:
‘Young age’ is your advantage for this. Adequate term insurance and personal health insurance is highly important.
Term insurance is a right life insurance for you and getting a personal health insurance cover is also important.
Now, you will think that why to have a ‘personal’ health insurance cover when you are a part of group health insurance provided by your company?
Please understand the reasons-
- Being in a private sector you are likely to change jobs for better prospects. Job security is also a question. When you resign from your jobs, many a times your insurance over cease at your workplace and when your join your next job, you are not provided with any group health insurance till the end of your probation period.
- All companies have different terms of group health insurance, each time you change your job, you have to accept it.
- Even if you continue with your job and stay with same organization till your retirement, then at that age, if you plan to apply for your personal health cover, then you may get it with stringent terms and conditions. Many insurance companies reject application if you have pre-existing deceases.
- While in employment, if you wish to quit your job and start your own business activity after a few years, then at that middle age, you will get your personal health insurance with highest co-pay, longest waiting period and high premium.
- Learn basics of personal finance elements:
Please make most of your free time and learn about basics of personal finance, investment instruments in basics like their risk levels, return potentials etc. when you know at least basics while investing, chances of mis selling are reduced.
You invest with vigilance when you know the basics.
- Make budget and stick to it for your monthly expenses:
It is an ‘old school practice’! your parents and grand parents made budgets and stick to it so, they could increase standard of living and give better life to us.
Its time to go back to old school theories now! Make budget now and stick to it no matter what.
While making budgets, please follow one principle-
Monthly income (-) Monthly investment= Monthly expenses
- Make your comprehensive personal financial plan:
Plan gives us a roadmap for using our finances in better manner and to achieve our goals. Personal financial plan is important because it plans for your taxes, retirement, investments, insurance and future goals.
It helps you to gain better perspective about money and investments.
Make your financial plan as early as possible for your good. Get it done from authorized expert who can give unbiased view and opinion about your personal finance.
So, dear young guys, take a third eye view on your finances, gain better perspective and with new way of thinking and habits, you can have better financial life.
And yes, along with good wealth, please build better health!
Health is utmost important and take advantage of your young age to gain better physique.