Financial advice to take note of before you hit 25Sharika S Nair
There are different ways people spend and save money. Although there is no golden age to start saving, there are certain things which you could keep in mind once you start earning. An average millennial usually starts earning around the age of 23 to 25. At this age you might be tempted to spurge uncontrollably considering the fact that it’s the first time a lump sum hits your account in the name of salary. And why not? It’s your hard-earned cash, right? But think twice before you splurge. While it may be absolutely fine to treat and pamper yourself, it is also necessary to plan for the years ahead. You might not realise it now, but the uncertainty and lack of stability in today’s world makes money saving even more vital.
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Here are a few things to know about finance management by the time you turn 25.
Investing regularly in equity and letting it grow will help you in the long run. Keep an eye out for the traditional investment methods and other money instruments. Go to the right people and seek their opinion before investing and saving.
Follow the 50/30/20 Rule
Fifty percent of your income goes into your necessities like rent, essentials, and insurance, 30 percent into leisure and non-essential spending, and 20 percent into your savings. Following this rule really helps.
Save up for retirement
Do not laugh it off under the idea that your retirement is ages away. Planning for your retirement that is probably 40 years away is just as important as paying off your grocery or credit card bills. So do your math and see how much you should be putting into your retirement fund to fall back on later.
Hold on before you use your credit card
Do not go out of limits and exploit your credit card. Pay your dues on time or else you will have a lot to pay for in the future. Credit cards do have as much benefits as reward points and discounts. However, you should use it sensibly if you want to make maximum use of it.
Start saving from today
The term ‘saving’ might not sound so pleasant, but in the long run it will prove to be music to your ears. Imagine you keep spending Rs 5000 every month on things you can do without. Now think about saving that over the years. How much will you have at the end of the day? Now consider investing that in something that will give you higher returns after several years. Sounds magical right?
Be happy and stop wasting
Invention has become the mother of necessity. Just look around your home, inside your cupboard, and underneath your bed. Chances are that you will find several things that have been stowed away without even being used. The next time you are tempted to buy something which just popped up in an ad, stop and think twice. Are you buying it because you need it? Do you really want it? Or is it that you simply think there isn’t any harm in getting it for yourself since you have a little extra cash in your account? By the time you are 25, you will have to ask yourself certain questions to help you plan for a better lifestyle.