Sumit should also periodically review his investments to ensure they remain relevant to his preferences and goals. Funds required for long-term goals must be held in investments based on his risk profile. Sumit can manage his risks by aligning the investment horizon for the products he is considering with the time frame of his financial goals. Investments yield higher returns but usually come with fluctuating values and lower liquidity. Parking the entire money this way could be a costly choice because of the trade-off for liquidity and safety, is lower returns. But holding the money this way is only suitable for unexpected or immediate needs that are usually few in a person’s life. The money in his savings account is readily available without any risk. Well, Sumit is making a mistake by not differentiating between savings, investments, and insurance. Learn how to mange your money & create wealth, Download your FREE eBook now Sumit believes that his provident fund contribution, savings, and insurance are sufficient to secure his future. He saves a good amount of his salary and invests in bank deposits, and is comfortable with short-term deposits that give him the flexibility to access his money whenever he wants. Sumit Mukherjee, 27, is two years into his first job. Understanding savings, investment, insurance To start with your financial planning, take a look at the six most important things to understand about money management that will help you lead a prosperous and comfortable life. Knowledge of the available financial products and their suitability to an individual’s goals is all that one should be concerned about. Trust me you don’t need to be outstanding in maths. Financial Planning for young adults like you, is a must today due to uberization of jobs, lack of job security and skill sets becoming obsolete rapidly.Īll it takes to start treading on the correct path to financial security is the willingness to create wealth and a little reading. If you are one of them and believe that understanding personal finance is far above your head, let me say you are wrong. Hence, most youngsters, when they join their first job or embark on a professional career are fairly clueless about how to manage their money. Personal financial planning, despite its importance, is yet to be taught as a subject in high schools or colleges in our country. Our guidance tells you how to check your credit report and how you can improve your credit score.6 Important Steps for Financial Planning of Young Adults: Whenever you apply for credit and make repayments, you should always be aware of the impact this can have on your credit rating. Read our guide What is Buy Now Pay Later? to understand how this works and how to use this payment method responsibly. It’s becoming more common for shops and websites to offer Buy Now Pay Later on your purchase. Check our guidance on borrowing from a credit union. If you’re able to join a credit union, you might be able to access a more affordable rate for borrowing. You should first make sure if you can afford to borrow then work out how much it will cost you over the whole length of time it will take you to repay the loan, buy now pay later agreement or credit card.īefore you arrange an overdraft with your bank or building society, read our guide Overdrafts explained. Make sure you understand the total cost of taking out credit and that you can afford the repayments. Because you’ll usually pay interest, borrowing can be expensive. There’s more information about the pros and cons of joining a pension scheme and how to do it in our guides Automatic enrolment if you’re 21 or under and Automatic enrolment if you earn £10,000 a year or less.īorrowing money can help you spread the cost of buying what you need over a longer period. Read our guide Automatic enrolment – what to expect from your employer.Įven if you're under 22 or earn less than £10,000 a year, you might still choose to start paying into your workplace pension. If you’re aged 22 and over, and earning over £10,000 a year, then your employer will automatically enrol you into a workplace pension. Read our guide Pay and benefits for temps and agency workers. Specific rules apply too if you’re a temp or agency worker. We explain them in our guide Understanding your payslip.Īs an apprentice, there are different rules around pay, which we explain in our guide Apprenticeships explained. You should also think about saving for retirement as soon as you start earning.įind out the National Minimum Wage for your age group. To make sure you’re being paid correctly, it’s important that you understand the payments and deductions you’ll find on your payslip. When you start a job or apprenticeship, you should check you’re receiving at least the minimum wage for your age and that you’re being taxed correctly.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |