Young Earners, Here is How you can Solve your Financial Problems
Food, cloth, shelter are the basic needs of any person. But in today’s world just having a roof over your head is not enough. In the race to come first, people carry big fat dreams with them. But sometimes your dreams can be a bit bigger and expensive than you think. Having a dream home, a luxurious car and also for that matter getting a higher education carries a lot of expenses. To fulfill these dreams you either need to have a huge bank balance or you need to do so in the near future.
But, this can get a little hard for a common man having a fixed amount of income every month. Achieving your dreams can really be hard if you have just started with your career. You need to note down your financial plan at the very start of your career if you really desire to achieve your dreams. This might not be as easy as it is said if you are really starting from scratch.
At the start, one might really be clueless about where to invest and how. It might also get difficult if you have no idea about the budget plan and also have no control over your expenses. This has become the problem amongst many youngsters. If the problem is not addressed at the right time you might get late in achieving your dreams.
So here are some tips on how to get started:
- Budget and Savings:
You can keep a habit of noting down your income and expenses. This will help you understand where your extra money is getting spent and how much you can actually save. You can easily do it by keeping a record in a book or make an excel sheet. You can also keep a track on your mobile.
Once you start doing this, it will be easier for you to track your income and expenses. This will then help you manage it. This will also help you cut down on any excess expense. The starting point of your career is when you should start saving as it will be very helpful in the long run.
- Framing your Financial Goals:
The main question is whether the amount that you save will be useful in 10-15 years. You should not only write down your goals but also make a detailed note about it. Divide your finances according to your goals and then make a list of each one clearly. Also, don’t forget to mention the term of your goal.
This list can help you in the future briefly on how much you need to save. Keeping in mind of the future price hike on the cars and house rates you need to manage your savings. Also, you need to consider your income, earning capacity and your future expenses which can occur suddenly, etc. while planning the goal.
- Investing Right:
The third step can be thinking about how to convert your savings into investments. If you are unaware of investment options you can certainly opt for banks. You can choose FD investment option as you have just started earning. But you need to look for factors like returns, liquidity and also tax liability before choosing. You can also go for recurring deposits, fixed deposits, and liquid funds according to the size of your goal. You need to research before you go for an investment instead of taking advice from your close ones.
- Going for the Right Insurance:
Insurance is not an investment which can help you get close to your dream like FD but instead it helps to cover your life risk. You might feel there is no such need of insurance as you are in your young age but it’s good to know about them as it’s your financial start. It is necessary to have a life insurance or a health insurance.