Languages: English Hindi

Deciding to move out? Keep these financial tips in your arsenal

Living alone can be quite an ordeal. Before you plan your finances, read this article to know how to manage your finances well.

The idea of moving out, and living all by yourself is very romantic. A large part of this independence is learning how to be financially independent. You should know how to provide for yourself, and make sure that you can meet all you current and future needs.

Given below are things you must remember when you move out.
 

Work on a Budget

You must put on the habit of operating on a budget. When you stay with your parents, you don’t have to worry about major finances like rent or groceries. But when you live by yourself, these expenses like mount up. So, you must make a budget, where you make an estimate of your expected income and your expected expenses, and plan out your savings. Doing so, will instil in you a sense of discipline and will make you free financially.

Transfer All Recurring Payments to Your Name

In order to become truly liberated financially you need to transfer certain recurring payments in your name. So, you need to transfer you Netflix account from your parents’ bank account to your bank account. Same goes for your Spotify Premium account. After these charges are taken care of, you must also be ready to pay the premiums on the Insurance policies that your parents must have taken in your name.

Find Multiple Income Sources

When you move out and live alone, you don’t have an extra source of income in your household. So, if for some reason, say you were to lose your job, then you need some sort of protection. For this reason, you must always have more than one source of income. This not only increases your income on a monthly basis, but also offers you protection in case of an emergency or a contingency.

Make a Diverse Investment Portfolio

As a young adult, you must not be dependent on anyone for your investment decisions and portfolio management. Parents usually advice their children on where they should invest their money. Your parents’ investment style is likely to be more conservative given their age. For this reason, you must aim at making a diverse investment portfolio for yourself. It should have a healthy balance of safe (savings account and fixed deposits) and volatile investments (stocks), and should be able to secure you consistent and stable returns.

Take All Your Original Documents with You

This is a thing that not a lot of people tell you about. Your parents usually have your original documents like your birth certificate, Aadhaar card and passport. To be the ultimate responsible adult, you must claim the possession of these documents- as you’ll be needing them at various points in your life. In case you want to open a bank account, secure a loan, or make a heavy purchase, it is imperative that you have these documents with you.

Learn How to File Taxes

Learning how to file your taxes is perhaps one of the greatest skills you can learn at an early age. Taxes are complicated. From the very beginning, which involves determining your residential status, to classifying your income into various income heads, to claiming the necessary deductions, to finally ascertaining your tax payable amount- it can all be a little complex. The sooner you learn how to file for taxes, the sooner will you become more financially independent.

If you follow these steps, and practice them on the daily- then no one can stop you from being a self-sufficient, financially independent adult.


Related Articles:

Savings vs Liquid Fund: Which one is the best for you?

Questions to ask before opening a savings account

SHARE WITH:

Contact us: onlineacctopen@gmail.com