9 Things every smart millennial girl should know by 25!

At 25, your rotis may or may not be round, but your finances should be sound. Here’s what you need to know to be a financially smart millennial.

  1. Opening and operating bank accounts Opening and operating a bank account is very easy. No need to rely on an elder or friend to manage your own money.
    Tip: Save time and operate your account online or through your institution’s mobile banking applications.
  2. Using Credit cards optimally Credit cards are like contact lenses – they improve your sight, but need to be handled with care. So, keep the credit card limit low and do not spend money you haven’t earned yet through credit.
    Tip: Save penalties on delayed payments by automating your card payments.
  3. Creating an Emergency Fund Everybody needs a 3 am friend. An Emergency Fund can be your friend at such times. Building it is very simple. All you need to do is contribute 5-10% of your salary to this Fund every month.
    Tip: Make this your mantra: “I will not use my Emergency Fund for ordinary expenses.”
  4. Maintaining a good credit score Parents’ approval matters. Similarly, financial companies look to credit rating agencies to certify your credibility. Know and maintain your CIBIL score. Avoid missing out on payments or apply for too many loans, especially unsecured loans.
    Tip: Choose a credible co-applicant for joint loans to avoid paying for their defaults.
  5. Securing health and life Before you fly or drive, you secure the seat belt. Similarly in life, secure your life with health and life insurance first. Ask for help if you want – but do it yourself. Otherwise, you may not know how to use it during emergencies.
    Tip: Clearly mention your lifestyle habits or existing diseases in the form to avoid claim rejections.
  6. Planning Taxes You are the earning member. You pay the Tax. Then why shouldn’t you plan your Taxes? It’s simple too – calculate your Taxable income; invest as much as possible in Tax-saving investments like Equity- Linked Savings Scheme (ELSS) and reduce your Tax liabilities.
    Tip: Start planning Taxes right from the beginning of the year to avoid last-minute hasty decisions.
  7. Filing Income Tax Returns (ITRs) No one knows you better than yourself, right? Then, why expect another person to file your Income Tax Returns (ITRs)? Get the required documents from work and financial institutions, and fill the form fields online. The forms do the rest of the work.
    Tip: Verify the form online through your Aadhaar, Bank account or digital signature certificate.
  8. Pursuing your dreams Every week, you regularly oil your hair for growth. Similarly, every month, invest a little bit for your future success through a Systematic Investment Plan (SIP). This can be for retirement, buying a house, funding your child’s education, or even supporting your parents. Don’t rely on anybody else.
    Tip: Different Mutual Funds (MFs) help achieve different Goals. Invest accordingly. For a peaceful post-retirement life, save at least 10% of your monthly income.
  9. Knowing how to invest In today’s day and age, you cannot fulfil Goals without investing. So, don’t let the lack of knowledge stop you from investing. When in doubt, opt for a Mutual Fund and rely on the Fund Manager’s expertise to invest on your behalf.
    Tip: There are plenty of knowledge banks available online or offline today. Use it to improve knowledge.

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