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Young Financial Planning: Are you getting your first job salary soon? Understanding these things will keep you out of trouble

Financial Planning: Garvit Malhan is very happy when the first salary comes in the bank account. The 23-year-old has started his first job as a Product Manager at a startup. Now they will no longer have to ask their parents for money to watch a movie, have dinner out with friends or buy something.

With the first salary, he has bought gifts for his parents. Have dinner with family in an expensive restaurant. But, along with getting financial freedom, it is also important for them to understand some things. From the very beginning, they have to make a plan to fulfill their financial goals. These may include plans to travel abroad for higher studies, buying a car or for a vacation.

Need to set aside some money every month

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Save Money Aside

It is important to have some savings along with spending. Financial planners say that you should set aside around 30-40 per cent of your monthly salary. This will be your savings. You can invest this money in mutual funds through SIP. You can invest money through SIP in 2-3 schemes. There can be two equity schemes and one debt scheme. Later you can think about your financial goals. This will give you an idea of ​​how much you need to save every month.

Khushi Arora is 23 years old. She works in a fintech company. Two months back, he left his parents’ house and started living separately. She used to invest 70-80% of her salary while living with her parents. Now being alone, she is able to invest 15-20%. But, it is good that she invests some money.

“You have to keep your retirement goal in mind from the very beginning,” said Vishal Dhawan, Founder and CEO, Plan Ahead Wealth Advisors. This may sound strange to you. But, most experts recommend saving a little for retirement. This helps a lot if you want to take early retirement or leave your job and start some other work.

Gajendra Kothari, MD & CEO, Etica Wealth said, “Enjoy your present. This time is not going to come back.” But, at the same time, it would be okay to set aside some money for your savings.

Get an insurance policy for yourself

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Insurance Policy

This is very necessary. First of all you should buy a health policy for yourself. “If you are 22-23 years old, then you need a cover of at least Rs 3 lakh. You have to increase it after every five years,” said Dhawan. Most people get a health policy from the company. Still, it is important to have your own health cover.

If you have members in your family who are financially dependent on you, then it is also necessary for you to take a life insurance cover. You have to keep in mind that you have to buy only term plan. You don’t have to buy an endowment plan. Most of the insurance companies show less interest in selling term plans and more in selling endowment plans.

Create an emergency fund

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Emergency fund savings

Have you thought about how you will meet a sudden big expense? For this it is necessary to create an emergency fund. With this, in the event of any kind of emergency, you will not have to spread your hands in front of others. The fund should be large enough to meet your expenses for at least six months. You can use liquid schemes of mutual funds or bank deposits to build this fund.

Take care of tax planning

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Tax Planning

If your annual income is above Rs 5 lakh then you will have to pay tax. You can save tax by investing in tax saving instruments. Under Section 80C of the Income Tax Act, there are many such instruments in which tax-deduction is available on investment. A maximum of Rs 1.5 lakh can be invested in such an instrument in a financial year.

“You should do your tax planning with a long-term goal in mind,” says Harshvardhan Rungta, Principal Financial Planner, Rungta Securities. For this, you can take the help of equity linked schemes of mutual funds. Long term investment in this scheme gives very good returns.

You have to avoid getting caught in the date trap. It’s okay to have a credit card. But, it is right to use it only when it is absolutely necessary. Using a credit card just to avail discounts and cashback is not a good idea.

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