What’s Your Financial Goal?

As a young adult who has started making money, you must be already aspiring to buy your own car or even a luxurious penthouse and you know what, that’s really superb! After all, wouldn’t it be a boring life, if you had nothing to look forward to. But to fulfil all your dreams and make it big in life, you must have a reliable financial plan and the necessary discipline to work diligently towards achieving your goals. Seems tough? These practical tips by Shilpa Shah will certainly be of help.

Young adulthood not only represents a wonderful time, where you are bursting with energy and enthusiasm, but if utilised well, it could also set the tone for your future financial security. In fact, this period is your biggest asset, as you have lesser financial liabilities and much more time on hand to earn, save and invest money (especially long-term). By starting early, you achieve your goals faster, in comparison to someone who is already middle-aged or about to retire.

Firstly, for you to achieve your financial goals, you need to plan in a SMART way. A well-defined goal has much more chances of being attainable as compared to some vague dream. Here is what SMART stands for:
S – Specific
M – Measurable
A – Achievable
R – Realistic
T – Time-bound
To be successful, you need to see if all your goals meet the SMART criterion. If not, then you really need to rethink and revise your goals.

Goal: Higher Education
It is possible that you may have already started earning after completing your graduation. However, it is always a good idea for you to plan and save for some higher education. Several studies have shown that there can be a significant increase in earnings due to further qualifications, because as rightly said, ‘there is always room at the top’. Also, in today’s competitive scenario, getting relevant education is one of the best career investments you can make. If you are aiming for it, then you need to consider some important factors, such as, whether you plan to work part-time, while pursuing your studies or completely plunge in; either ways, with the cost of education shooting up, you can look at taking up an educational loan.These days, many banks are offering these loans with a convenient payback period, where repayment usually starts after course completion, in a year or so, thereby providing you sufficient time to pay it off. Visit your bank to get a better understanding of the terms and conditions involved.

Goal: Buying a Vehicle
As a teen, you would have dreamt of getting your own set of wheels; a jazzy two-wheeler or maybe your first car and now that you are earning, surely you must be dying to get one soon. But wait, hang on a second! Instead of making an impulsive purchase and repenting later, why not study the pros and cons and then decide what is best for you. First, you should figure out, if you really need your own vehicle? If yes, then, how do you plan to pay for it (fully or partly as car loan EMIs) and whether you can really afford all the expenses that come along with it? In addition to the actual cost of the vehicle, there would be many recurring expenses such as the fuel expenses, insurance and maintenance expenses that need to be factored in as well. The good news is that car loans are available on new as well as used cars, so if you can’t afford a brand new one right away, then even a second-hand car is a reasonable option. Usually, banks have tie-ups with corporates to offer loans at better rates to their employees. So check with your company's Human Resources (HRD), if there is any such scheme available for you too. And now, if you think, you have it all figured, go ahead and fulfil your dream.

Goal: Home Sweet Home
If you are single, you could be living in a rented house or with parents. But eventually when you settle down and your family expands, you will have to look out for a bigger home. Also, as the long-term trends indicate, property rates keep rising, so why not start now? And even though you are allowed to be carefree and indulgent at times, don’t waste these golden years, as they are best for investing for a stable future. However, investing in property is an expensive decision; a huge milestone in itself and hence calls for proper planning and execution. If you are planning to use your savings or borrow funds, or take a home loan, just make it a point to talk to a financial expert to get a clear understanding of your tax liabilities. Also, since banks compete fiercely in the home loan space, make sure you take full advantage of this opportunity. You should also consider stretching your income through multiple avenues. One good way, would be to start investing early inequities and mutual funds for better fund appreciation over longer time horizon. But before doing all that, it is advisable to consult a professional investment manager to understand your risk appetite and also the benefits and the risks involved, while investing in various financial instruments. In case, you have a low risk appetite, put your money in fixed or recurring deposits, so that the money stays locked in and can come handy, when needed for a specific purpose such as buying
your home.

Goal: Setting Up Business
If you are one of those, who have been bitten by an entrepreneurial bug at an early age, then pat your back. It definitely takes a lot of courage to chase your dreams and make it work, since in business, you don’t have the surety of a monthly salary package and other associated job securities. Sometimes, people think that having
a great concept is all that is needed, but in reality, to be successful, it is not enough to just have a strong business idea; you also need funds at every step. Hence it is important to dive into it, only after you have thoroughly examined all the financial implications. One of the issues that Small and Medium Enterprises (SME) face is lack of credit at a reasonable interest rate. But, don’t let that deter you from achieving your goal. If you are sure of your business proposition, start approaching a few venture capitalists and also analyse the pros and cons of the diverse funding options, available in the market. For eg, a business loan under a government scheme has low interest rate and can also help you with your ongoing funding requirements. Many public sector banks as well as private players also offer various financial schemes to small businesses. You can also check out the Make in India programme, which was initiated by the present Union government for facilitating business ventures.

Goal: Marriage
You might have no plans to marry anytime soon, but since marriage is an important milestone in life, especially in the Indian context, it is wise to start planning for it right away. And though they say, marriages are made in heaven; a lot of efforts at the ground level are needed to make it work. Now, depending on your and your partner’s preference, the wedding could be a simple ceremony or a glamorously orchestrated; opulent one! And so, if you are the kind, who has been dreaming of a magnificent one, then apart from the myriad thousand things that are required, money is the chief one and will be needed at every single step. Surely then, such grandeur calls for some financial planning on your part. However, the most important tip is to start saving for this big occasion. You can also look at some mid-term investments, which offer you good returns and are relatively less risky. For more funds, you may opt for a Personal Loan, as many banks are now offering them as customised loansto ease out any financial blocks in your wedding plan. These loans can be easily availed by both salaried, as well as self-employed individuals, provided you meet the eligibility criteria such as age, income, employment status etc. with the requisite documentation. Plus, these loans come with flexible and customer-friendly EMIs, tenures and interest rates to suit your needs. So then, if you have already found your special ‘someone’, get ready to get hitched; the stage is set!

Now that you know how to plan and achieve your important financial goals, use these key tipsfor a happy and financially-secure life ahead! And remember, youth doesn’t last forever, so be prudent and try to take maximum advantage of this fruitful phase by starting…right away!

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