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4 Money Management Tips for the Young Professionals

March 04, 2019

4 Money Management Tips for the Young Professionals

When you are young, then you have limited responsibilities on your shoulders. It’s also easier to save money when you don’t have a family to support. Unfortunately, a large number of young professionals fail to manage their income properly which is why they often end up with little to no savings and a bad credit score. 

If you want to be in control of your finances, then follow these steps:

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.

Check Your CIBIL Report
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.

Learn About Taxes
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. 

Create an Emergency Fund
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.

Are you interested in learning more about money management and taking your career to the next level? Check out the professional diploma course in banking management by us here.

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