We've compiled a list of steps you can follow from the start of your earning years to help you stay financially sound for a long period.
Know your assets and liabilities
It is crucial to understand the details of your assets, and liabilities. It is important to know what assets you have and what liabilities you owe. Assets include cash in savings accounts, stocks and shares, as well as property and vehicles. EMIs and mortgages are on the other side. Loans, credit card bills, etc. It will help you to see your financial picture. These can be calculated every three months by adding all your assets to the total of your liabilities.
Stick to a budget
It is a great way to keep your finances in check. We underestimate the power of a budget. In a nutshell, it covers your earnings, expenses, and savings info. You can use this budget to determine how much you should save to achieve the goals you have set for yourself.
Start your savings journey
Financial fitness is all about saving. It is easier to be financially strong when you have some money saved for emergencies and for achieving a goal. You can open a zero balance account online or a traditional savings account to be prepared for any future situation.
Set your goals
It is a good idea to periodically assess your goals in order to get an idea of how much you will need for it. This will help you to find the most efficient way to save money as per your requirements.
You might save Rs. 3 lakhs for a car worth Rs. You save 3 lakhs for a car that is worth Rs. However, you discover a better version for 4 lakhs and you don't have any extra savings. If you had continued to look for variants and assessed them, you would have realized that more savings would get you a better vehicle. It is important to assess your goals.
Take control of your taxes
It is important to have enough money to pay your tax bill by the due date. In India, April 15th is the most common date. Your tax bracket will determine how much national income tax you owe. However, there are many factors that can affect this. Your employer will withhold taxes from your paycheck in most cases. However, the amount withheld may differ from what you ultimately owe. If you're self-employed, however, you'll likely have to pay an assessed amount of tax instead. This is usually every quarter.
Verify that your goals and investment are aligned
You should align the amount you save or invest with your goals. If you are looking to purchase a house, you will need to know how much you can afford for the booking. You should also plan your investments accordingly. To avoid financial tension, keep them in balance.
Find out if you have the correct insurance
It is essential to have insurance that covers your assets, health, life, or term. We live in a fast-paced world and need to be insured to ensure that we can meet any financial emergency. Make sure to review your insurance policies from time-to-time and receive updates as necessary. Click here for more details.
