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You're Guide to Spending wisely for a Financially Stable Future

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You’re Guide to Spending wisely for a Financially Stable Future
February 20, 2023

Table of Content

 

We live in a world of limited resources, and we should be mindful of our expenses. If we avoid budgeting today, we will worry about our finances later. Let’s look at valuable habits you can build at various life stages to build a corpus and enjoy a financially stable future.

Budgeting on Your First Salary

Let’s look at what you can do when you’re in your 20s, and you’ve just started earning:

  • Save and invest at least 20% of your earnings. If you start early, you can build a significant corpus at a lesser investment and achieve your goals more quickly.
  • Always spend mindfully. Designer suits and the latest smartphone are aspirational, but it’s wiser to opt for budget items to save more money.
  • Find ways to match your spending with your savings. Whenever you treat yourself, put an equal amount into your savings. For example, if you’re going to a movie on the weekend, transfer an amount equal to your ticket and snack cost into your savings and investment fund.
  • Purchase a term insurance plan. You can get a high sum assured amount at a low premium to cover you for a long time. Depending on the policy, you can opt to have your sum assured increased at particular milestones or every year.

ALSO READ - 5 Smart Purchases From Your First Salary

Managing Finances When You Get Married

When you decide to get married, you become responsible for another person. Here are some simple ways you can manage your finances as a newlywed couple to save for a better future:

  • Consider hiring instead of purchasing. Everything from rare books to high-end cars and camera lenses is available for hire. Hire based on your need instead of investing in something you use sparingly.
  • Try and budget your entertainment costs. If you’re travelling, opt for off-beat locations or travel during the off-season to reduce the cost. Instead of meeting friends at a restaurant, consider hosting people to save money on expensive food outside.
  • Find ways to save on your taxes. Choose tax-saving investments to save more money in the present while building wealth for the future.
  • Select a life insurance policy that provides financial stability to your spouse if something happens to you.

Intelligent Ways to Save as a Parent

As a parent, you want to do everything possible to look after your little one. Let’s see how you can plan your finances once you grow your family:

  • Activate your auto-pay facility to take care of bills and premiums without attracting penalties or fines. With education costs on the rise, you want to start saving early for your child’s future.
  • Look at refinancing your home loan. Compare the interest rates offered by various lenders and try and shorten your loan tenure with prepayment. As far as possible, work on clearing all debts quickly.
  • Plan all your gifts in advance. Whether you’re shopping for a birthday, anniversary or festival, plan your presents early and take advantage of sales and offers to maximise your savings without compromising on your gifts.
  • Purchase a child plan that helps you invest in your child’s future while offering life coverage for you and your spouse.

Best Saving Habits When You’re Nearing Retirement

After years of working and saving, you’re almost ready to hang up your work boots. Here are some smart tips to help manage your finances before you retire:

  • Get regular medical check-ups to monitor your health. It can help prevent sudden major medical expenses in the future.
  • Clear all your debt while you’re still earning. Ensure you don’t have any loan or revolving credit pending once you retire. Move from using credit to debit cards. Earn payback points and enjoy the benefits.
  • Revisit your financial plans and check their maturity. Your investments must be near their end. Check whether they’ve performed as expected or take remedial actions to reinvest before it’s too late!
  • Identify annuity plans that offer monthly payments while also providing life coverage for you. The payouts should then go to your spouse to provide them with financial stability when they need it most.

You should always make prudent financial decisions regardless of your current life stage. Use these pointers to get your finances in order and enjoy a secure future. Remember, good decisions today can help you enjoy a safe and financially stable tomorrow.

ARN – ED/02/23/32319

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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.

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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.

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