Moving out is a big decision. Once you have found the perfect location and the perfect roommate, the task of being independent truly begins.
It’s going to be a big change, be it emotionally or with regards to responsibility.
But, most of all, financially.
It’s time to get that coin while ensuring that things don’t go for a toss!
1. Banking On Yourself
This tops the list of ‘Things-my-parents-should-have-taught-me-before-I-moved-out’. Setting up a bank account (Oh gosh! How many proofs do they need?), getting access to net banking and getting your debit card are the first steps to being financially independent.
The next is to learn how to use net banking and to create a UPI ID linked to your bank account. Having access to a debit card can come in handy for it’s the easiest way to keep your money in your own hands. And in a future post-covid, you’ll need the physical money more than you think!
Financial education sites like Credit.org offer great insights into money management for newbies. Now all that’s left is to take (money) matters into your own hands!
2. Learning To Budget
After the initial joy of breathing the air of freedom dies out, the daunting responsibilities resurface. You have to shop for your groceries, pay your bills, buy your necessities, maintain your things and even go to the doctor’s office all by yourself.
When it comes to splitting bills between roommates, apps like goDutch serve as a lifesaver. Here, you can not only split your bills and keep track of expenses but also settle via UPI! There are also reminders and a group chat to keep tabs on pending expenses. Make sure to discuss all the money matters beforehand to avoid things from becoming real awkward later on!
3. Saving Little To Save Lots
Have you ever seen your mother being a lifesaver in the middle of a family financial crisis? How does she have all that money? The obvious answer is, she SAVES.
Saving small amounts of money for a long period can not only serve as an emergency fund but also can also be used to buy the things you only dreamed of buying. This will also indirectly make you conscious about the way you spend it and will help you ward off the unnecessary expenses.
Even saving a minimum of 150 rupees every month will lead you to save 1800 rupees in a year. Apps like Perfios and Walnut can help you organise your savings. You can set your yearly targets and they will automatically withhold a certain amount every month to help your yearly goal. Keep saving and then treat yourself real soon!
4. Getting Invested In Investments
The thing that most of us are confused with is – What is the difference between saving and investing?
Investments means depositing money to create wealth for long term goals. It is usually done by putting the money into the market by purchasing stocks, bonds or real estate. The risks involved are high and the returns, if favourable, are huge. The liquidity is low when you invest money. So be very sure that you won’t be needing this money in a short while.
There are lots of myths surrounding investments, especially in middle class households (because Sharmaji’s neighbour’s sixth cousin’s nephew lost a huge sum in the stock market 20 years ago). You don’t have to be rich or to have studied the stock market in depth to invest. The only thing you need (after money and knowledge, of course) is consistency. Sites like Moneycontrol, LiveMint and GSN Invest can help the beginners to get a hang of the stock market and help you decide the companies you want to invest in. Lo and behold, you’re all set up for your long-term returns!
5. Giving Credit Where It’s Due
In recent years, there has been a steady increase in the number of students who use credit cards in India. But, there’s both an upside and a downside to this. Everyone starts out getting a credit card to gain financial independence and try & build their credit score but before they know it, they’ve racked up a huge balance.
Credit card literacy is needed to understand the mechanism on which different cards work and what type of card/ownership would benefit you the most.
Websites like Chime and Investopedia help you learn to use credit cards responsibly and effectively, thereby helping you on your path. Use websites like BankBazaar and OneScore to keep a track of your credit score.
Moving out is a huge step in everyone’s life and monetary issues are the number one cause of exasperation. Handling all the things together for the first time is overwhelming but hey, we learn by trial and error! Though it may seem challenging for a while, it will help you learn financial management in real life.
Get the true value for your money!