From that new branded shirt, the sky-high priced perfume, to the camping tent that you never used, most of us do hold aspirations and inclinations of consuming more than we produce or rather earn. Besides, several banks and credit card companies have made discipline and self-control even more difficult by offering a plethora of almost unrealistic buy now pay later options.
As Warren Buffet remarked, “Someone is sitting in the shade because somebody planted a tree a long time ago.” Saving and investing at a young age is essential for a secured financial future. Yet it is equally important to know that money shouldn’t be kept idle at the banks. Leaving money idle renders it a victim to inflation. So how do you ensure that you have a strong, tall and deep-rooted tree to sit under during a sunny (or rainy) day? Plant your sturdy and reliable tree using 3 these tips:
If your annual income is between 6-10 Lacs, these 3 things could BOOST it further!
1) Incur “Healthy” debts only
Impulse buys such as that smartphone with the High EMI that you obviously can’t properly afford right now is NOT the best idea. They will be shipping the next version of that just 6 months from now, right after your appraisal when you can actually afford it debt-free. #TrustUs! And sure, your new toy would add that extra spark to your life, but honestly at the back of your mind, won’t that niggling worry be affecting your productivity and peace of mind? Here’s some math for you: Peace of mind > Pleasure +Pressure. Especially, when you’ve just joined a new workplace; you’ll have ample pressure to deal with in any case.
At the same time, there are some debt-incurred expenses that are absolutely justified, such as that property or home in that up and coming area that will not only be your biggest pride but also a sound investment. If an attractive home loan eases the purchase and is financially viable, go for it. Or if you want to invest in yourself, by taking up a course that adds to your skillsets and furthers your career, you could consider a loan for that! Pick wisely. Maybe even consult your mentor or people whose judgment you respect. You’ll be happier for it.
2) Don’t ignore Investments and Insurances
Often people in the income bracket of 6-10 lacs, overlook financial planning altogether, assuming that there aren’t any viable investment avenues available in that range. Nothing could be further from the truth. A savings account is just the path of least resistance. Go beyond that, albeit do keep a certain portion of your earnings there as it would well be the safest bucket. Additionally, yet one requires an ideal insurance plan to protect themselves and loved ones from uncertain mishaps.
In such regards, Units Linked Insurance Policies are the modern decision. They integrate the dual benefits of insurances and investments, permitting reserves in qualified instruments like bonds and equity funds at minimal risk, while at the same time providing cover against accidents and illness.
3) Invest in “Productive” Personal Indulgences
Spend on things that have value. Ditch that bottle of beer and buy an instant coffee maker instead. Ditch that deal on 10 bags of chips and if you really need to buy convenience foods, how about instant oats or “upma”? Healthy and convenient! Instead of that LCD TV, take up kickboxing lessons. A much healthier and fitter form of entertainment. Because life is all about new, fulfilling experiences. Balance wisdom and whimsy!