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Financial Planning for young Person : A Roadmap To Success

Posted on January 26, 2025

Starting financial planning at 23 can ensure long-term stability. Here’s a summary

1. Set Clear Financial Goals

  • Short-term: Emergency fund, debt repayment.
  • Mid-term: Higher education, travel, vehicle purchase.
  • Long-term: Retirement planning, home purchase, wealth growth.

2. Budgeting Basics (50/30/20 Rule)

  • 50% for essentials (rent, groceries, transportation).
  • 30% for lifestyle (entertainment, shopping).
  • 20% for savings and investments.

3. Build an Emergency Fund

  • Save 3-6 months of expenses in a high-yield savings account.

4. Manage Debt Wisely

  • Prioritize high-interest debt like credit cards.

5. Start Investing Early

  • Consider PPF, mutual funds, index funds, and SIPs.
  • Take advantage of compounding.

6. Retirement Planning

  • Contribute to EPF, PPF, or NPS for long-term savings.
  • Utilize employer contributions.

7. Health and Life Insurance

  • Get health insurance for medical emergencies.
  • Consider term life insurance for dependents.

8. Improve Financial Literacy

  • Read books, attend webinars, and follow financial news.

9. Avoid Lifestyle Inflation

  • Focus on savings and investments over unnecessary spending.

10. Tax Planning in India

  • Utilize Section 80C deductions (PPF, ELSS, Avoid LIC etc.).
  • Take advantage of Section 80D for health insurance benefits.
  • File ITR on time to avoid penalties and claim refunds.

Starting early with consistent and smart financial decisions will ensure a secure and prosperous future .

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