25-30 is the age when you get into a job, start earning and gradually discover your future worries. Many newly employed individuals fail to utilize their earnings optimally, thus making them run out of cash and resultantly zero savings. Responsibilities may suddenly feel like a burden. However, financial planning is the only way one can think of for meeting their present as well as future expenses efficiently.

Below are some financial tips to adhere to, especially when you’re new into your job:-

1. Re-allocate your Budget- It’s time to re-think on your budget or alter your age old expenses keeping in mind few future expenses such as buying a house, buying your desired car or saving for your sister’s or your own wedding. Rethink before buying any new gadgets unnecessarily when not in dire need of it.
2. Automate your Savings- Being a young independent youth it’s hard to find a balance between enjoying the present and planning for the future. Saving manually to achieve a financial goal is not so easy. Rather than trying to save every month and finally not being able to do so, automate your savings by automatically transferring 10% of your income in savings bank account which also provides you with 4-5% of interest every month on your deposited amount.

3. Pay-off all your Debts- Never get trapped by any Credit Card related schemes which might be attractive in short run, but is a resistance to your future goals. Clear all your dues and EMIs (if any) and make sure to avoid any credit transaction in future. Credit attracts interests which might seem easier to pay now, but is a huge liability for long run. Always pay your bills on time and never get indulged in late fines.

4. Invest in Mutual Funds- Long term Mutual Funds investment carries specific financial goals with specific returns which gives investors the option to invest small amounts periodically. Long term investment attracts tax advantages and the volatility rate is lower. Mutual funds allows investors to diversify the risk in various stocks which decreases the rate of losing money.

5. Make an Emergency Fund- Since you are young and healthy with almost no medical flaws, this is the time when you should start keeping aside a portion of your income so that you have something to spend when something unexpected happens. Decide a fixed amount to be transferred in respect of your income to the emergency fund. Make a strategy to save first and then spend the remaining.

6. Plan your Taxes- Tax is a compulsory payment to be made to the government within stipulated date. Tax planning should be done wisely so as to refrain from paying off excess money to the government and having less to spend for one own self. Pay less tax legally using all the possible loopholes without evading or avoiding tax from the government, thus being a good and smart citizen.

Naseeb Ali, Wealth Manager Career Program-03

Edification Academy