In India, husbands and wives fight over many issues, including financial discipline. While individual experiences might differ, husbands live in the present by spending more than what they should and wives try their best to prevent the same using their futuristic vision. Enjoying your present is important but taking your eyes off your future goals by spending injudiciously will only cause you pain.
In today’s uncertain times, every penny saved is like gold. Should you lose a job or meet other uncertainties that cause a loss of income, the savings you make in your hay days will let you tide over uncertain times and make you feel at ease. That being said, how to set the tone for a hassle-free future? What financial discipline one must follow keeping in mind the varying lives people have? While some families have multiple breadwinners, some have only one with tons of responsibilities. Let’s delve into the solutions.
Check Out the Financial Discipline to Implement
It’s about starting off early to maintain the momentum throughout your work life. The tips mentioned below will help you do this critical task successfully.
Start Investing for the Future at the Earliest
Start from your first salary itself. No matter the quantum of salary, save at least 10-15% of the same in savings accounts, mutual funds, etc. If your family is reasonably sound on the financial front, invest in the high-risk, high-return proposition of equity mutual funds that help raise your invested capital over time.
In case your family requires frequent financial support, park in the best liquid funds that are much like savings accounts but come with a better return. While savings accounts yield you around 3-6% yearly return, liquid funds will likely earn you a 7-9% return. Compared to equity funds, liquid funds come with a lower risk.
But given their high-return proposition, you can’t ignore investing in equity funds. So as you move up the professional ladder, use the increased income to park in these funds to bolster your future.
Stay Away from Credit Cards at the Start of Your Professional Journey
The building stands tall as long as its pillars are strong. So, get your foundation right by avoiding unnecessary expenses that credit cards can lure you into. Banks and other financial institutions offer a myriad of credit cards to salaried customers based on their income, savings account, professional experience, etc. But they can put you off from your financial goals by allowing you to purchase a lot more than your hard cash can.
Such liberties come with an interest cost ranging from 30-45% per annum should you fail to clear or partially clear off the dues. With incomes likely to be modest at the beginning of work life, the chances of payment default or partial payment are higher. It’s not okay, particularly for those who are single breadwinners with tons of responsibilities.
As your salary grows to a level where you can easily repay credit card debt on time, have one that meets your requirements the best way. This way, you can build a strong credit history, opening up doors for loans when you require them the most.
Take Loans When You Need
Don’t take loans for unnecessary means. Loan warrants when there’s actually a need. For example, you can avoid taking a loan for travel. But when it comes to marriage and child education, apply for a loan. However, choose the loan amount carefully. Consider using a portion of your savings to reduce the loan amount and the interest payment that follows. At the same time, shop for the best interest rates online.
Buy Life & Health Insurance
Life insurance is one of the best tools to secure your family financially after your death. You can choose from term insurance, endowment insurance, money back, unit-linked insurance plans, etc. However, choosing the best term insurance plan is imperative. This insurance plan offers much greater life coverage in exchange for the lowest premium among the life insurance alternatives.
Health insurance is also a must given the rising healthcare expenses in India. As per the Sustainable Development Goals National Indicator Framework Progress Report 2023, over 90 million Indians live in families where healthcare expenditure amounts to 10% of their overall expenses. Among those, 31 million live in families where healthcare expenditure accounts for 25% of their overall expenses.
Imagine the lost savings due to healthcare, which can be restored by choosing the best health insurance plan online. But have it at the earliest to enjoy maximum coverage at reduced premiums. The health insurance plan will cover your healthcare expenditure should you fall ill and receive medical treatment against the illnesses covered under the same.
Wrapping Up
Let’s have no compromise on financial discipline. Resist your tendency to spend on unnecessary means by looking at the larger picture i.e. financial independence no matter the time. Start early as emphasised here to build a corpus that can see you through different times. Don’t be shy to break the rules by saving more than what the standard rule says. For more such insights, stay glued to zarooribaathai.in, a one-stop destination where you know things in depth for informed decision-making.
