Financial Planning in your twenties

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India is a young country. Approximately 60% of the Indian population is below 30 years of age. Asian Development Bank estimates India's working age group to top most others globally in the next 2 decades. This would comprise those between 15 to 64 years of age. The large young and urban population (the working population with purchasing power) adds to our countrys economic growth enormously. It is the major driver of consumption as this young population has the ability (disposable income) and willingness to spend due to rising income levels (increasing instances of double incomes in most families). The increase in the number of nuclear families, easy financing options, increase in the population of working women continue to contribute to the increase in the domestic consumption propelling growth. Meanwhile this young segment continues to buy homes and select insurance, loans and retirement plans with little attention and relevant a dvice. For example, very few individuals start retirement planning when they are young. We agree that planning for your future can be tough for anyone especially in this age of unlimited spending and investment choices. So we at InvestmentYogi have taken the overwhelming task of financial planning and broken it down for you in few simple steps. With these pieces in place, you'll be well on your way to financial security. 1. What are your aspirations? Work out what your goals are. It may not always be career or marriage or children centric. A goal can also be something you have been longing to do since a while. Is it trekking the Mount Everest? Is it going on a complete world tour? Or is it attending art lessons in Europe? Whatever your goals are, try measuring them in money terms so that you know before hand their precise financial requirements to help you plan better and achieve them too! Saving for a car or a holiday is a great way to fast-track a sense of achievement and it sets up an invaluable habit Saving. Save up ahead of time and you'll be in key position to make the most of your thirties. 2. Understand your money: Your parents maybe trying to help you prepare your taxes, balancing your checkbook or managing your investments, but they may not be around forever to help you out. While there's no denying that 20s is the time for experimentation, the fact is, you're not a kid any more. Once you start earning, your finances are your responsibility and there may or may not probably be a wealthy Prince or Princess waiting to sweep you off your feet. Why take a chance? Focus on learning the true value of money and how to be responsible for your self. You need to succeed financially on your own. 3. Build an Emergency fund and seek Insurance: It pays to be prepared for the "what ifs" in life. For any age group maintaining an emergency fund is a must. During the start of your career, investing in Health insurance is a necessity to protect you from the downside of a possibility of an accident, illness or disease which can lay a considerable hole in your pocket. House owners insurance and auto insurance also require equal mention. Plus, if you have children, life insurance is an absolute MUST. 4. Stay away from debt: Debt is one of the biggest financial problems facing young adults. Live within your means. Can't afford something? Don't buy it. Learn to keep spending in check while you're young and you'll save lakhs of rupees over the years -- and save yourself a lot of stress, too. A monthly budget helps keep your spending in check and in the process, frees up money in your budget you never knew you had. Borrow only to build your wealth. Pay off your credit card bills in full every month. Keep tidy financial records. Not only would you need a down payment to buy a house, you would also need an established credit history and a record of on-time payments. Building a good credit history in your twenties will ensure it's ready when you need to use it. Read in between the lines before entering into a contract and ensure you uphold it financially. 5. Think Retirement: When you are in your 20s, it is easier to focus on immediate and short term needs. However, it's not so easy for young adults to start planning for their retirement seriously from their first job itself. After all, retirement is a long way off. Yet it is the most essential piece to ones long term financial security. Unlike in the US, in India the government does not provide social security on retirement. An individual has to depend on his own investments for his retirement nest. When you're young, time is on your side. The sooner you start investing toward your retirement, the bigger the amount you accumulate. 6. Increase your social network: Join or create an online community. Increase your social network and learn from each other. Even if you are a non-finance executive, you can still improve your financial literacy by reading books, searching the web, joining a community or a club or talking to experienced people. 7. Get yourself a financial plan Financial planning serves very important purpose of bringing discipline and clarity to your investment habits. An ideal plan gives you a complete picture of your current investments and liabilities, your net worth, cash flow, goals and a specific plan to achieve those goals. When you are young you tend to live for the moment and do things as they come but it's very important to secure your financial future. At the same time it does not have to be at the cost of a good lifestyle. The decisions you make today about your career, education, debt and retirement will stick with you and shape your future. So, invest in yourself. Start early. Start small. And ignore the typecast. To end with, a few lines from the poem by Juanita Bratcher: Life can be enlightening

Indeed it can be challenging, too

It can be a roaring opportunity

But that depends on you Never throw in the towel because things don't go your way

Just ride the tides of patience

And keep focused on your dreams each and every day for more information go to investmentyogi.com To avail yourself for free financial planning please go to http://www.investmentyogi.com/Financialplans/common/home.aspxAbout the Author:

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