Personal Finance is a topic that goes overlooked by most millennials these days. Imagine yourself as a freshly graduated college student about to enter the early years of a job and do want to take financial decision that you would regret few years down the line. While finance can get complex, LiteFin has simplified few tips that will keep your hard-earned money in line while preventing you from making financial mistakes at the same time.
Here are some financial practices that we at LiteFin follow to get the best out of our income:
Spending no more than 30% of your monthly income on your desires:
There is a good chance that you are looking of tons of materialistic things with fresh money in your hands but spending it all in one place might be a risk for your future and in case of emergency you will have no cushion to fall back on. If you want a depreciating materialistic item, make sure its price doesn’t go beyond 30% of your monthly income.
Setting up an emergency fund:
Before you go about how to spend your money make sure to have set up an emergency fund. To pick a sum for the fund, make a thorough calculation of your monthly essential expenses and save up said sum that will last a year upon which block that amount in a FD or something with assured interest only to be broken at the time of emergency.
Investing from Day 1:
The power of compounding cannot be ignored so make sure to start investing, be it stock, funds, gold, and the plethora of options that the market offers today. While you don’t need to invest large sums, fix a portion around 20-30% of your monthly income and put it up for investing every month without failing.
Life and Health Insurance:
Do not buy a Life and Health Insurance policy just to save taxes but putting in a fraction every year can save your loved ones during a mishap. Such policies can be fine-tuned in many ways, and it will not be difficult to find one that suits your monthly income. A health insurance can take care of your medical expense in the event of hospitalization while Life Insurance can save your family in the event of an untimely death.
There are more than these five tips that will help with your financial decisions, but these lay a good foundation to get started on. These rules are ideally to be followed from your first paycheck but you can never start investing too early therefore start right away. Here at LiteFin, we bring the best advises for Personal Finance, so stay tuned for more.
