Turning 30? Here are 10 financial decisions you must take now
OWN A HOME
Everyone dreams of buying a
home, and the sooner the better. If you are still renting out, start planning
to invest in a house. Understand your financial capacity and gauge if you can
afford buying a house at this stage in your life.Rent is nothing but a
liability, as the huge sum you pay every month actually settles in someone
else's account. If you cannot afford a house in your current location, invest
in a property a little away. Remember every EMI brings you closer to owning the
house.
SAVE BEFORE YOU SPEND
As they say , do not spend
before you save, but do the vice versa. Make sure you always set aside a part
of your income as savings on payday . The habit of spending first and then
saving the leftovers is a bad idea since you always end up blowing a lot of
money . Create a separate account where you can keep your savings; make sure
that you do not have easy access to this account. For instance, do not opt for
a debit card for this account. You can use these savings to do things you enjoy
, like travel, buy jewellery, etc. so that you do not depend on your salary for
these expenses.
MAKE ARRANGEMENTS FOR EXTRA INCOME
High-paying jobs and busy
schedules are a common story. However, other than a chosen few who have bagged
government jobs, job stability and security is something that most of us are
worried about. While we all count our blessings before appraisals, none of us
can actually guarantee a peaceful retirement, unless you have a Plan B. An
extra source of income is the need of the hour, for every salaried individual.
Be it a smallmedium enterprise or a big family business, make sure you plan a
stable source of extra income at this age. I'll support you and keep you
financially strong.
INVEST HEAVILY, AND WISELY
Most of us show PPF
investments and rent receipts as a part of our annual investment declaration
and get away with it, feeling relieved that we have saved a lot of tax.
However, planning serious investments is something that you must do at this
age, be it stocks, shares or mutual funds -make sure to invest a lot of money ,
but remember to do it wisely . Consult a financial advisor who could guide you
as to which funds will ensure good returns as well as a tax rebate.
LEND RESPONSIBLY
We all like to help our
friends and relatives, in fact when it comes to lending we are quite selfless
as we usually avoid asking them to return the money . Small expenses upto Rs.
500-1,000 need not be accounted, as we always have a barter system in place,
when it comes to paying for each other. However, if it is anything above that,
ensure to make a note of the same; also, set a timeline within which the person
should return the money . By doing this, you ensure that you do not end up in
debts and are not taken for granted.
GET RID OF RIGID DEBTS
Of course, we have debts,
like credit card bills, luxury car instalments or personal loans you may have
taken for a house renovation or a dream holiday .Make sure you repay and close
all these debts at the earliest. Especially the ones that charge you heavy
interest rates, since they make your finances look weak and also utilise a lot
of your earnings. Try limiting your credit card usage to the bare minimum. In
fact, stop using one as it simply adds to unnecessary debt and compound
interests from time to time.
SET ASIDE AN EMERGENCY FUND
No, this money is not the
regular savings you make every month. An emergency fund, as the name suggests,
is kept aside for crisis situations. Emergencies can never be foreseen, be it a
sudden illness or unemployment. Make sure you keep aside enough money so that
you can handle any of these emergencies without being worried about the
availability of funds. Also, even if you exhaust the last penny of your salary
a couple of days before payday , do not touch the emergency fund, as every time
you withdraw from that account, it fails to serve the purpose.
PLAN YOUR RETIREMENT
With our current lifestyle
and the health issues it brings along, our retirement might knock in slightly
earlier. Make sure you are ready to retire and settle down for a relaxed life
at an early age, may be 48. Right from arranging for a stable income post
retirement, to a lump sum amount that comes in every year, make sure you are
financially independent for a stress-free retirement. Starting at this age is
the right thing to do.
BUY A GOOD INSURANCE POLICY
There are several insurance
advertisements that we keep watching, and they all glorify their respective
products. These explain the role insurance plays in financially stabilising
your life at various stages like -children's education or marriage or simply
maintaining a good lifestyle even after the sudden demise of an earning member,
etc. While we all wish we don't have to face such situations, life is highly
unpredictable. Having a life insurance or a term plan will ensure that all these
commitments are financially taken care of, while you still take time to heal
yourself emotionally . It is better to start an insurance policy early as the
premiums are lower and you get more time before you reap the benefits.
INVEST YOUR DISPOSABLE FUNDS IN PROPERTY
Even after investing in
funds, taking care of your utilities and paying your monthly liabilities, if
you are left with a considerable amount of money , make sure you invest it in
property . Property , today , is the most profitable investment, as it is a
growing market. You can always rent out an unused house and get some extra
income out of it, which will only strengthen your finances.
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Srishti Shinde
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TOI3FEB16
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