A budget is nothing but a roadmap that provides an estimate of finances for a given period of time. Make a practical and logical budget that you can stick to. List down the usual expenses, such as an education loan EMI, rent, grocery bills, utility bills, etc. Then, put some money aside for monthly savings. Strike the right balance between spending and saving and you will have a budget that you can easily stick to.
As a young individual without too many responsibilities, saving money might not be your priority. While it is absolutely fine to spend your money doing the things you like, you should make a conscious effort to save as well. Save small amounts of money and consider investing in SIPs or FDs. This will help you to get more money out of what you save.
Get life insurance and a health insurance plan pronto! Getting life insurance in your early 20s has a multitude of benefits, such as easy acceptance and low cost. Getting a health plan is also crucial, as a medical emergency can drain all your money overnight. Get these two policies and safeguard your finances in a foolproof manner.
Whether it is a large credit card bill or a business loan EMI, a debt can pull you down if you don't take charge of it. Avoid using credit cards as much as possible. Pay cash or use your debit card. This will prevent you from spending recklessly. Also, avoid taking on large financial liabilities, such as home loans or business loans right away. Wait for a few years till you have a better income to take the loans you need.
Saving money is crucial, but leaving it idle in a savings bank account won't serve you too well. Learn about the various investment options available. This is a good time to invest, as you don't have too many financial liabilities. However, be cautious and invest only after you understand what you are investing in. Get into the habit of investing from an early age and you will have a solid framework to fall back on as you get older. Some great options for you are SIPs, equities and fixed deposits.
You're never too young to be money wise. The quicker you get hold of your financial wellness, the quicker you achieve your true independence. You don't need to be earning millions to be financially strong - you just need to know to make your money work for you. Keep the points mentioned above in mind and become a financial expert right from a young age.
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