Read on to understand the 5 major mistakes you might be making in handling your personal finances and how to solve them to have a better and healthy financial future.
1. Not Investing Until Your Income Is Higher
To start with, we all in our young age think that we have a lot of time to start with our investment plans. Stocks, properties, shares, SIPs, Mutual funds are some of the examples where an average Indian can plan their investments. The case is not that the age is less, but that you have ample of time to invest.
Starting your investment journey in your 20s is the best option. Learning, going with the trends will make you well versed with age, and you can invest better when you are at an age earning good enough to have spare money.
2. Showing Off More Than You Afford
Show off and fads are drowning the youth and it does not benefit anyone, especially if we talk about financial health and wealth management. Do not show off what you do not have is one of the greatest tips you will receive at a young age that will help you later in life when you grow old.
Showing off more than what you can afford will only lead you in making expenses that are not necessary and will elevate impulsive shopping. It is okay if you wear a 1.5k shirt and your peers are wearing 2.5k worth of it. Save, invest, do not fall under peer pressure or you may regret it in your 50s.
3. Not Investing In An Emergency Fund
Not investing in an emergency fund at the right age will lead you in a hustling state when you cross 50. Start saving with a savings account in your 20s and create an emergency fund for yourself which will come handy in situations of health emergencies, family emergencies and more. One of the great examples of the requirement of an emergency fund is losing your job, this fund will be helpful to pay off your expenses at these times. Experts say that an emergency fund should be anywhere from 3 months to 6 months of your salary.
4. Not Investing In SIP
SIP, also known as Systematic Investment plan, is an investing option that needs your attention at a young age. Mutual funds and SIP are, however, subject to market risk but are not something that should not buy your attention. This helps you grow your money with less investment. Nevertheless, do your own research before you land up in the journey of investment.
5. Taking Too Little Risk With Investments
Taking too little risk might sound fine as it neutralises the chances of losing money that you have invested. However, the market is filled with options and slowly and steadily you should add up more money in your investment plan.
Do not invest without researching and studying the current market status.
Conclusion
Do follow these financial tips from an early age and you will save yourself from any regrets in your older age. The sooner you start saving and investing, the better off your financial future will be. Click here for more financial tips.
