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Practical money tips to be aware before you are 25!

Practical money tips to be aware before you are 25!

As per a recent study by IIMA, it was observed that the average financial literacy rate for the age group below 25years in India is less than 40%. This means that if you ask 10 questions to a teenager about finance, he might answer 1 of them. That means people under 25 years of age are not financially literate. We live in the digital age where information is right in front of us. So, let us enlighten ourselves and gain awareness about money management among the youth of today.

India’s young millennials may not have full-time jobs or they don’t have to pay their house rent or mobile bills. But it’s important that their financial knowledge or money management skills are in place so that they know how to manage their expenses. We give you 5 practical money tips:-

  1. Opportunities out there

One of the most common complaints I have heard from youngsters is that nobody wants to hire a young person who is still studying. Well, that’s not true! There are many companies who offer internships like Microsoft, Tejora technologies, Clover Infotech, etc. If not internships then you can start working online by taking up online jobs like a virtual assistant, writing, drawing, etc from websites like people per hour, freelancer or upwork etc.

  1. Understand Investment Options

Now since you know how you can earn your monthly expenses on your own it’s time you start investing, before that it is important to understand the terminology that is used for various finance functions. Also, get a basic amount of knowledge that how each finance instrument works. Here is a small chart to explain you various investment options:-

Investment Options for teenagers

Slonkit gives a basic amount of knowledge that how each finance instrument works

  1. Why You Should Invest

As a teenager, this is the right time for you to start investing. When you start investing early by the time you cross your 30s or 40s you will have enough investments and savings. These financial instruments give bonus and interest quarterly, yearly or as per your investment option. You should make sure that the option that you choose will give you at least three-fold or at least two-fold at the end. This amount will be enough for you to start your own venture or buy your own home. You will save enough that by the time you retire you will have your savings and income sorted. For examples, you may invest into LIC Money Back Plan, this plan gives you 125% the returns at the end of your investment of 15 years. So, if you start investing when you are 20, by the time you are 35, you will have a huge sum of money at your disposal. Similarly, you may use various schemes like fixed deposits, bonds, post office schemes, etc. Below is a table giving you details about these investment options:-

Sr No. Best Investment Options & Plans Type Of Investment Option Comments
1 Fixed Deposits Low-Risk Investment Option Consider Credit Profile, Interest Rate & Interest Payout Frequency
2 Post Office Schemes Long Term Investment Option NSC, PPF, KVP, POTD, etc.
3 Endowment Plans Low Risk Investment Option (Assured Payout)
4 Data Safe Investment Option (Similar to FDs) Bonds are analysed in the same manner as FDs
5 Bond Funds High-Risk Investment Option (as compared to Bonds) Corporate bonds, government securities, money market instruments
Source:-http://www.hdfclife.com/insurance-knowledge-centre/tax-saving-insurance/safe-investment-options-in-india-for-2015/

Abbreviations :-

  1. NSC (National Saving Certificate)
  2. PPF (Public Provident Fund)
  3. POMIS (Post office monthly income scheme)
  4. POTD (Post-office time deposit)
  5. KVP (Kisan Vikas Patra)

Now since you know the basics of finance management and investments its time you plan your future and decide your financial investment options. It’s the digital era, where every information you seek is at the tips of your fingers and is available online. Utilise the resources to your best abilities for a brighter future. if you have any query you can always write back to us.

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