A financial checklist can help us become more diligent in planning. It is no different in its approach and what better than starting it from the New Year. Following is a checklist for working youth:
The youth sometimes engage in buying stuff that aren’t affordable like a flat with heavy EMI. This can be very stressful and disrupt your happiness. Purchases like these are required to be managed very well as we might end up with no leisure life at all.
Savings first, expenditure later
In most cases, the exact opposite happens. Giving little preference to savings can be unhealthy. Therefore, savings must be planned before and accordingly the expenses should be worked out.
Some youth have a lot of dependents on them. In such cases term insurance is a must, as life is full of uncertainty. The dependents should be sufficiently secured. A part of your income must be made towards term insurance policy.
Just saving is not sufficient. Funds must be invested in avenues such as, mutual funds, equities or other instruments rather than letting them rot in savings account. Investments help in protecting us against inflation. As our income may not match the rising inflation, our investments will.
Keep one eye on retirement
This is essential, because you cannot be employed your entire life. Hence, it is necessary to plan retirement early and create a fund or investment for the same. Retirement need not necessarily mean savings of money, it can also be for small scale business capital useful for early retirement.
The author is head of Money Mantra, a Mumbai-based financial advisory firm