I am sharing this article as someone with an educational background in engineering and management, coming from a middle-class family. My goal is to give personal finance advice to young professionals, especially those who may not usually read articles or journals on the topic.
Recently, there’s good news: hiring is picking up across industries and experience levels. This is great for India, where there is no social security or welfare support, no matter how long or how much you’ve paid in taxes while working.
It has been hard to see many professionals struggling due to salary cuts or job losses. I feel for them and have tried to help wherever possible.
What surprised me was that even professionals nearing the end of their careers, holding senior positions, were struggling as much as younger professionals, who generally have fewer opportunities to build financial security.
While everyone’s life situation is different, I believe many could improve their financial health if they paid as much attention to it as they do to work and social life.
The harsh reality is that our education system doesn’t teach personal finance, and socially, it’s often considered rude to discuss money. Most of us work long hours without learning how to manage finances, and the need becomes clear only when tough times come.
Today, there is plenty of information available for self-education and many financial advisory services. It’s important to consciously use these resources for better personal financial management, which helps fulfill personal goals and prepare for difficult times.
Personal finance tips from experience
Start saving early: Begin from Day 1 of your professional life, even with a summer job or internship. It’s never too early.
Invest smartly: Money in a bank account isn’t enough. Invest in financial instruments that beat inflation.
Take educated risks: Higher risks early in life can lead to higher long-term returns.
Insurance is essential: Life, health, and asset insurance are critical. Don’t rely solely on corporate health coverage.
Be careful with market tips: Trading can be exciting but usually doesn’t provide stable long-term returns unless you have time to monitor it.
Plan for retirement: As you approach retirement, make sure your investments are liquid and can provide an alternative income flow.
I am not the richest person, but I’ve been able to check off many bucket list items. I hope these personal finance tips help young professionals. I’m happy to connect individually to help anyone get on track. Work hard, play hard, but invest harder!
This article was contributed by Shailendra Nath
FAQs on Personal Finance by Shailendra Nath
Q1. Why is personal finance important?
Careers today are more volatile than before. Jobs may not last a lifetime, and business dynamics are constantly changing. Personal finance helps create assets that can provide alternative income, especially during uncertain times, as seen during the pandemic.
Q2. How does personal finance affect professional success?
Managing money well teaches you value and discipline, which also translates to your work. Understanding budgeting, cash flow, and spending is essential as you climb the corporate ladder.
Q3. What is personal finance?
Indian culture emphasizes saving, which is good but not enough. Savings should be invested to grow and cover:
Short-term goals: House, car, vacation
Mid-term goals: Children’s education, marriage
Long-term goals: Retirement income. Many face early retirement and need to start saving as soon as possible.
Q4. How should personal finance be managed?
It should be taught in schools and colleges to build basic awareness. For beginners:
- Read from neutral, reliable sources.
- Compare products carefully.
- Consult professional advisors but avoid those pushing only one product.
A simple, prudent investment approach is enough. Decide your risk appetite and start early; the process doesn’t have to be time-consuming.
Q5. Why does personal finance depend on behavior?
Each generation has different needs and goals:
- Gen Z values experiences and hobbies, sometimes over permanent jobs.
- Risk appetite varies; some prefer moderate risk for moderate returns.
Doing nothing and avoiding risk is not an option. The sooner you start managing money, the better your financial well-being.
