4 Money Management Tips for the Young Professionals
March 04, 2019
Create a Budget
No financial plan can be complete without a proper budget. This is because only with a budget you can have a good understanding of the inflow and outflow of your funds.
A budget consists of your fixed monthly expenses (house rent, Internet, etc.), flexible expenses (food, transportation, etc.) and your various sources of income.
Once the budget is created, identify your luxuries like eating out, movies, etc. and remove as many of them as possible in a way that you are able to save at least 10% to 20% of your income every month.
As soon as you become a salaried individual, you must start caring for your credit rating. A high credit score can help you get loans easily and at affordable interest rates. You can take this responsibility by checking your CIBIL score first. As per RBI’s regulations, you are allowed one free CIBIL report per year.
If your CIBIL score is below 750, then you should start taking steps for its improvement like timely payments of EMIs, lower credit card utilization, etc.
Do you file Income Tax Return (ITR)? If your answer is “no”, then you should start filing it from this assessment year onwards. Plus, you should learn how to save taxes by buying insurance policies, investing in 5-year fixed deposit accounts, PF, etc.
Life is unpredictable. So, if there is a medical emergency or you get laid off, then you need to have an emergency fund that you can fall back on. Ideally, it should be at least worth your three months’ salary.