Managing your personal finances can be tricky, especially if you’re just starting out. For the first time, there’s an influx of a steady income. On the other hand, there’s a surge in your needs and a plethora of options to spend on. Not being prudent at this critical stage could kick off a long journey of mismanaged finances.
Here are five things to consider for building a robust financial foundation:
Your personal financial journey should include long-term investment plans. You will reap incredible benefits tomorrow if you manage your finances well today. In addition to regular savings and fixed deposits, consider other promising alternatives like stocks, SIPs or mutual funds, which offer diversified investment. South Indian Bank has a wide range of mutual fund investment options you can choose from.
Having to spend money is an unavoidable part of adulting. Create a financial roadmap every month by tracking expenses so you can allocate your income effectively and avoid overspending. Instead of using cash, you could consider getting a debit card with amazing rewards. South Indian Bank's debit cards offer exceptional convenience and robust security. They come with enticing rewards and exclusive offers across a wide range of products.
- Put Together an Emergency Fund
Life is full of surprises, most are pleasant, but some can be expensive. Try to save at least 6 months’ worth of expenses in a separate savings account. This fund becomes your safety net in case of unforeseen circumstances like loss of job, family emergency, medical bills, urgent repairs, etc.
- Steer Clear of Lifestyle Inflation
Lifestyle inflation is when your spending increases in proportion to your earnings. It can make savings difficult, because it can leave people feeling no better off than before, despite an increase in income. Instead of upgrading your lifestyle with every pay increase, consider investing the extra income.
Another aspect of savvy financial planning is protecting yourself with an insurance plan. South Indian Bank offers great health insurance options to shield you from unexpected medical bills. You can also start early and invest in life insurance, which could be an invaluable safty net for your family.
Personal finance doesn’t have to be complicated. If you plan ahead, you can take charge of your money and set yourself up for success. Keep reminding yourself that the journey to financial independence is a marathon, never a sprint.
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Disclaimer: The article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of The South Indian Bank Ltd. or its employees. The South Indian Bank Ltd and/or the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial/non-financial decisions based on the contents and information’s in the blog article. Please consult your financial advisor or the respective field expert before making any decisions.