Q. What middle class people should do to secure their financial future?
A. While wealth management plays a very crucial role for all, it has always been about the budget when it comes to the middle class. Traditionally, Indian middle-class used to be a unique mix of people with a high moral and low budget. However, with the fast-paced changing times, this definition has also evolved as people are increasingly looking for high paying jobs and becoming more aware of their personal finance management. Some important financial tips for the middle class of today are mentioned below:
- Adjust your lifestyle to your income level: Taking a leaf out of the traditional middle-class values, setting a realistic financial goal and making a plan to achieving it is vital. Given the flux of social media, brand loyalty and the latest trends, it is easy to become gullible to such rat-races, it is important to stick to your finances and keep a clear head.
- Save money: Once you get your monthly income, first save some amount of money as per your financial goal and then use the remaining amount to spend wherever you want.
- Invest regularly: Investment is essential to stay protected from inflation and to expand your wealth over a period of time. However, investing in the right avenue is important.
- Focus on effective tax planning: Taxes eat away a significant portion of the income, therefore effective tax planning is important to avail the best benefits. Consult your tax advisor to avoid unnecessary tax loss.
- Spend smartly: Avoid buying depreciating assets, rather spend on appreciating assets which can help you to increase your income. For example, buying a car could be a depreciating asset whereas purchasing a property to earn rental income is an appreciating asset.
- Try your hand at different things: Try to increase your income through different skills and expanding your network. Having more than one sources of income can propel your finances as well as skillsets. However, do keep in mind, this should be legal. For instance, you could take tuitions on the weekends while continuing your office job, as these two are not interconnected.