Let s make money efficiently


Comment Synopsis The twin behavioural devils of ignorance and procrastination push most people into their 30s before they get down to streamlining their finances. The twin behavioural devils of ignorance and procrastination push most people into their 30s before they get down to streamlining their finances.

10 Simple Ways to Manage Your Money Better

Dreams, these days, come with a high price tag. A car for Rs 5 lakh, a house for Rs 50 lakh, several lakhs for a decent education for kids and crores for a cushy retirement.

let s make money efficiently

In fact, seemingly simple needs have been elevated to dreams due to the high cost associated with them. You require either a large income or a strategic plan to meet these basic life goals. While the former may not always be easy for the average salaried person, the latter is certainly within reach, especially if you begin at the beginning.

let s make money efficiently

However, it may not be as easy as it seems. This is a predicament many youngsters in their mids face.

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This often results in faulty investment choices, flawed portfolios, unmet goals and financial insecurity later in life. We, at ET Wealthwill try to remedy this through our cover story this week. In the following pages, we offer the newly employed youth a step by step guide to plan their finances.

Eight money tips to help young earners plan their finances

We focus on the building blocks they need at this stage: budgeting, goals, investment, insurancetaxation and salary structure. However, this is merely intended to propel them into planning and they will need to research and learn continuously throughout their working lives. Remember, financial freedom is not achieved the day you start working, but the day you get your finances in working order. Also Read: Young earner? Five financial mistakes you may regret later 1.

let s make money efficiently

Note down your monthly spending as per your ease of usage: Excel sheet, simple diary, mobile app, or desktop. The aim is to know how much you spend under various heads. After you have budgeted for months, you will realise that your expenses can be sorted into three categories: essential, discretionary and entertainment.

let s make money efficiently

This will help inculcate a lifelong saving habit and make sure that you money starts to work for you immediately. The earlier you start saving, even if it is a small amount, the more time your money will have to grow. Even as you start saving, another first is to start educating yourself about every aspect of personal finance. The more informed you are, the better your decision-making.

Toby Walters is a financial writer, investor, and lifelong learner. He has a passion for analyzing economic and financial data and sharing it with others. Don't worry that you're not a math whiz; great math skills aren't really necessary - you just need to know basic addition and subtraction. Life is much easier when you have good financial skills. How you spend your money impacts your credit score and the amount of debt you end up carrying.

Also Read: Do you know your financial personality? Take this quiz!

let s make money efficiently

People tend to save aggressively and invest with extreme vigour, but do so blindly, jeopardising their goals. Video how bitcoins work is a mistake common to most investors, irrespective of the age group. The next step then is to frame your goals.

Split your goals into three categories: short- medium- and long-term goals.

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Then list each one clearly, along with the number of years to achieve each, and the exact amount you will need. Once you have penned down your goals, you will be able to determine how much and for how long you will need to invest.

If you decide to buy a car that costs Rs 5 lakh today after seven years, it will cost you Rs 8.

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Similarly, the post-tax returns from a fixed deposit that offers 7. There are let s make money efficiently things you need to consider while deciding goals.

Eight money tips to help young earners plan their finances - The Economic Times

Also remember that these milestones may alter somewhat with your changing circumstances, say, after getting married or having children. You will then have to make the necessary adjustments. If you think you cannot do so on your own, take the help of a financial adviser who takes into account your specific needs and wants. Five financial mistakes you may regret later 3.

Essentially, the investment let s make money efficiently should be chosen in line with your goals and time horizon.

Let's Make Money, Honey!: Screw the "money mindset" thing & get some cash flow already

The medium-term goals should have a mix of debt and equity. This is because debt will offer you the safety of capital since you need it in the short term, while equity has historically given the highest returns in the long term. This is a simple generalisation, but as you have just started earning and are not familiar with the investing territory, go for it till you are better informed. Then take into consideration other factors like returns, liquidity and tax liability before choosing an asset class.

B Productivity Enhancing Apps For those who actually plan to work on their time away, we can now look at apps that can help improve performance, eliminating the routine and mundane tasks from the daily schedule. Noting down your tasks, optimizing your time to avoid wastages and even keep track of your expenses, apps today can help you achieve it all. You could save important articles, take notes and improve overall efficiency with the many apps available in the current market.

For near-term goals, opt for recurring deposit, liquid funds, fixed deposit or short-term debt funds. For the medium-term, you could choose balanced funds and equitylinked saving schemes.

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Bengaluru -based Siddhartha Nayyar, 23, is learning from experience. On the other hand, year-old Dharma Teja is learning from observation. He is, however, accumulating funds for short-term goals and should shift it to debt as he approaches the goal.

let s make money efficiently

He should diversify into equity soon. Which investment should you pick? Consider the goal tenure, returns, taxation and liquidity before investing your hard earned money.

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However, it is important to brush up your tax awareness at the earliest. Start with avenues that offer tax deduction of Rs 1. Then opt for investments that fit in with your goals and needs, or those that are being made by default. These would include premium spent on health plans under Section 80D, which is up to Rs 25, for self and dependants, and Rs 30, for senior parents.

Another important thing is to calculate the returns from your investments after considering the tax. So Palit should undersrand that gold ETFs will invite short-term or longterm capital gains tax.