This article is for the youth who have recently started a job. We will give you some basic Personal Finance tips. If you have started earning, the you must be equipped with basic knowledge about saving and investments. Having a regular income is not enough for financial independence. In light of the experiences of the global pandemic situation, it is highly advisable to have a sound financial framework.
Right Investment Strategy
Having an accurate investment strategy is necessary for financial freedom. It proved to be very helpful in crisis like pandemic. Many young people do not understand the importance of saving and managing Personal Finance from the very first job. This is the reason why they spends haphazardly.
Youth have no strategy to maintain their financial independence going forward. This problem gets further aggravated with the increase in financial responsibilities. According to Investment advisors, the right strategy for saving and investing is to begin from the very first job.
Monitoring Bank Statements
To avoid unnecessary expenses, you must keep an eye on the bank statement. This will help in controlling expenses in a better way. This is also an important component of managing your Personal Finance.
Pay credit card bills on time
Always pay credit card bills on time. It can also be auto debited from your bank account. You can use this feature to avoid inconvenience.
Save First Spend After
The golden rule is to Save First Spend After. For example, you are eyeing a brand new gadget. So instead of jumping in to a mega expense like that, you must start saving for it. The strategy of spending first and putting the remaining money in savings is not a good for your financial health.
The financial advisors believe that the sooner you start investing, the stronger you become financially. Investing early also allows the money to grow substantially over a long period of time as the compound interest earned on the investment earns interest.
Invest in Mutual Funds and Stock Market
One can start investing in stock market and mutual funds to make big corpus. However, investing in the stock market may seem difficult to many in the beginning. Apart from this, you can also earn profit by investing money in SIP (Systematic Investment Fund).
Diversity in Investment Needed
One can diversify the portfolio by investing money in real estate mutual funds, stocks, gold and fixed income instruments. Because of this, as a newcomer, you can avoid losses due to volatility in the returns of different sectors.
You can also invest money here
You can invest in PPF, VPF. By investing money in PPF, you can also get tax exemption on investments up to Rs 1.5 lakh annually. Meanwhile, through VPF, you can contribute more to the PF account. 8.5% interest is available in PF. Start investing as early as possible in pension funds. Also, make sure to buy health insurance and term insurance as well.