RESUME APPLICATION PAY PREMIUM
Fund Performance

Fund Performance

Knowledge Center

Knowledge Center

About Us

About Us

Tools and Calculators

Tools & Calculators

Quick links

Mobile (Download app)
  • Webpages
  • Documents
  • HDFC Life ClassicAssure PlusInvestment
  • HDFC Life ClassicAssure PlusInvestment
  • HDFC Life ClassicAssure PlusInvestment

For NRI Customers

(To Buy a Policy)

(If you're our existing customer)

For Online Policy Purchase

(New and Ongoing Applications)

Branch Locator

For Existing Customers

(Issued Policy)

Fund Performance Check

RESUME APPLICATION PAY PREMIUM

What do you want to do?

Quick links

Mobile (Download app)

Download HDFC Life App

Buy plans, track your policy, make renewal payments & monitor fund performance with HDFC Life App, Download Now!

Apple Logo Go to Google Play Store

How Much of Your Paycheck Should You Save? Budgeting Basics for Gen Z

down-arrow
Budgeting Basics for Gen Z
September 22, 2023

Table of Contents

 

“Your generation doesn’t know the value of money!”If you belong to the Gen Z bracket, chances are pretty high that you keep hearing this from your parents, right? And this is because the generation your parents belonged to, had an entirely different view towards life.

While the earlier mindset of living frugally and saving up for children and future generations worked for our parents, Gen Z is more inclined on taking life as it comes. Keeping mental health and meaningful work as top priorities, they keep spending on things that would make them enjoy every passing day. Lavish holidays, trendy gadgets, swanky cars, hangouts at posh eateries—the list is endless. But despite that, it’s important for this generation also to prioritize life goals and make a financial plan that would keep their future on a smooth track.

The ideal financial strategy for Gen Z, who are mostly in the early stage of their career, should focus on inculcating in them a habit of savings and making them value money. Thus, at this point, investing in plans with a guaranteed return can always be a safe bet, be it a one-time investment plan or a long-term investment. Here a good insurance plan with a return of premiums option can indeed be a fruitful choice. In addition, this can be beneficial for tax savings1 as well.

So, how much money out of the pay check should be saved?

Going by the income allocation pattern of our parents’ generation, the 50-30-20 rule can be a wise pick for Gen Z as well. According to this thumb rule, 50% of the income should fund the needs, 30% should fulfil wants and the remaining 20% should be kept for savings.

However, there’s nothing to worry about if you’re at the starting point of your savings journey. Experts say, there’s also a 20/10 rule of financial plans which should be kept in mind. According to it, the total debt should not exceed 20% of the annual income while the monthly outstanding amount should not cross 10% of the monthly salary. 

There are a few basic tips that can be helpful here.

  • Having a long-term financial goal is necessary. It would automatically help you spend wisely and manage savings in a way so that the goal is achieved.

  • A bit of cost-cutting can be useful. Putting a check to your credit card bills is an easy way out here, that would eventually take you out of the debt loop.

  • Setting medium-sized financial goals is an achievable task. No point in overburdening yourself with unrealistic targets.

  • Save strategically for tax deductions to enjoy your earnings. Investment plans with tax benefits1 are wise picks.    

  • Make sure you are adequately covered by life insurance. Put aside money in a one-time investment or long term investment in a sound term insurance plan that will provide for your family and dependents in the future, if you are no longer around.

  • At the start of your career, retirement plans are not a priority for many. But it’s advantageous if you start early and reap the benefits in full when you reach your retirement.

Rest will indeed fall into place!

Related Articles:

ARN - ED/08/23/4254

Term Plan Articles Term Plan Articles

Investment Articles Investment Articles

Savings Articles Savings Articles

Life Insurance Articles Life Insurance Articles

Tax Articles Tax Articles

Retirement Articles Retirement Articles

ULIP Articles ULIP Articles

Health Plans Articles Health Plans Articles

Child Plans Articles Child Plans Articles

Popular Calculators Popular Calculators

Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

LinkedIn profile
Author Profile Written By:
Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

LinkedIn profile
Reviewed By Reviewed By:

Here's all you should know about life insurance.

We help you to make informed insurance decisions for a lifetime.

Who Should Know Your Financial Secrets? Here’s Why It Matters!

Who Should Know Your Financial Secrets? Here’s Why It Matters!

Know who in your family should be aware of your financial secrets. Understand why sharing financial information is crucial for securing your family's future.

How Rising Interest Rates Impact Your Investments—and What You Should Do About It

Preserving Your Investment: How New Tax Rules Affect Real Estate Sales Before 2024

Financial Freedom for Women Entrepreneurs: Unlocking Success with the 50-30-20 Strategy

Learn financial freedom for women entrepreneurs with the 50-30-20 strategy. Discover expert tips for balancing dreams, responsibilities, and achieving long-term growth.

Financial Freedom for Women Entrepreneurs: Unlocking Success with the 50-30-20 Strategy
Investing Basics: Why Diversification Is Important Previous
Growing Together, Saving Together: Financial Tips for Married Couples Next
HDFC life
HDFC life

HDFC Life

Reviewed by Life Insurance Experts

HDFC LIFE IS A TRUSTED LIFE INSURANCE PARTNER

We at HDFC Life are committed to offer innovative products and services that enable individuals live a ‘Life of Pride’. For over two decades we have been providing life insurance plans - protection, pension, savings, investment, annuity and health.

Disclaimer

  1. Tax benefits are subject to conditions under Sections 80C, 80D, Section 10(10D) and other provisions of the Income Tax Act, 1961.

This material has been prepared for information purposes only, should not be relied on for investment, tax or any accounting advice. It is requested to seek advice of your financial advisor with respect to any investment or financial decision. 

Popular Search

Popular Searches