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India today boasts of being home to a major chunk of young people who form the bulk of our population. This is an incredibly strong and sizeable workforce and talent pool from which the leaders of tomorrow will emerge. As such, it is extremely important that the financial safeguarding and monetary strength of this large chunk of population must be duly take care of so that they can enjoy the benefits of careful financial preparation later in life. When it comes to young earners i.e. people who have recently started working, there are certain factors that separate them from those who fall in a higher age group. The needs and requirements of this chunk of population are quite different from others and often, they may tend to make certain mistakes due to lack of proper financial guidance.
Being frugal does not mean being overly cautious or unreasonably holding on to the available funds. Being frugal means to be able to differentiate between essential and non-essential expenditure and prioritize the expenses in such a manner that surplus funds can be retained.
Budgetary planning is essential as it gives you a clear idea about what to spend and makes you responsible about the avenues of income that you have. This helps you channelize your funds accordingly.
Setting financial goals for the future can help you formulate a proper plan of action in a timely manner so that you can have the monetary resources available by the time of actual requirement.
Inflation or the general increase in prices over a period of time is a very important factor that must be considered while planning your future goals.
Investing in high-risk equity or low-risk debt instruments has its own respective pros and cons. Therefore, understand your risk-appetite, financial goals and seek advice from a certified professional before investing your surplus funds in these instruments.
Investing in a suitable life insurance plan is very essential as it serves as a low-cost instrument for future financial security. With the advantage of time on your side, you can have a sizeable corpus by the time of maturity.
Investing in suitable health insurance plan takes the worries about a health-related contingency off your shoulders and therefore, a health insurance policy safeguards your finances during such times of emergency.
This is very critical and in fact, this is where young earners generally tend to make a mistake. By investing in an annuity scheme like NPS or market-linked retirement plans, you add to your overall benefit due to the power of compounding. This means that there will be very extensive returns by the time you retire.
Investment is tax-saving schemes like NPS, NSC, ELSS etc. can go a long way in ensuring that you are not burdened with taxes and that you get to build your fund reserves. Such exemptions are allowed under Section 80Cof the Income Tax Act, 1961.
Unit-Linked Investment Plans or ULIPs come with a lock-in period of five years and offer insurance as well as investment benefits. There are additional tax benefits as well and therefore, ULIPs are ideal for mid-term financial goals.
HDFC Life offers various saving and investment plans that are aimed at making your funds grow and ensuring that you get to retain a strong monetary core at all times. For details, click on the mentioned link:https://www.hdfclife.com/savings-plans.
We help you to make informed insurance decisions for a lifetime.