Money talk: Turned 35? You should have done these things by now

Age brings tonnes of responsibilities including financial ones. Money being the key to fulfilling your life’s aspirations, it is absolutely important that you take the steps necessary for your financial security. Time is of the essence. Timely steps bear the sweetest rewards, whereas delays make you vulnerable to life's vagaries. Here are steps you should take before 35.  

HAVING AN EMERGENCY FUND
You need 3-6 times your current monthly income locked in a fixed deposit. This is only to help you recover from emergencies such as job loss, damages, repairs, and health problems not covered by insurance. Not done it? Get started on priority using a bank recurring deposit or fixed deposit.

GETTING HEALTH INSURANCE
Healthcare isn’t cheap. Healthcare inflation is steep. A hospitalisation could wreck your savings, but a health insurance policy will keep you covered. Not got one yet? Get one without delay to cover all your family members. Already have one? Ensure your spouse, children and parents are covered too.

CHECKING YOUR CREDIT SCORE
At some point in your life, you’ll need a loan or a credit card. Then, your credit score will come to your aid. Don’t be in the dark about your credit history. Keep checking it periodically. Haven’t done so yet? Get your free credit report online instantly. If your score is low, take corrective actions.

OWNING A CREDIT CARD
There’s no need to view credit with trepidation. Disciplined credit card use is one of the best ways to build a good credit score of 750 or more. Besides the credit on tap, you can also get rewards, discounts, deals and discounts through your card, which can help you enhance your lifestyle and savings. Don’t have a card? Go online to see which cards you are eligible for, or check with your bank.

GETTING YOUR FIRST WHEELS
Using public transport is often taxing. In big cities, it’s common to run up a one-way bill of Rs 200 while using app-based taxis. This is costly in the long run. Why not go easy on your finances and get yourself a new set of wheels? If you commute long distances, the vehicle will pay for itself in the long run. If you need financing, go online or approach your bank.

BUYING TERM INSURANCE
This is a must for persons with financial dependents. If you were to suddenly pass away today, how would the income needs of your dependents be met? A term insurance policy gives you large coverage at affordable costs. Don’t have one? Get a cover worth 10-20 times your current annual income.

CREATING A RETIREMENT FUND
Retirement is not always for senior citizens. It’s also an option you can exercise before the age of 60 to get out of the rat race and lead a life you desire. Retirement planning should ideally be started in your 20s. Small investments can go a long way in securing your retirement. An equity mutual fund SIP for Rs 5,000 a month providing 12 per cent per annum over 30 years gives you a corpus of Rs 1.8 crore. If you haven’t started retirement planning, consult an investment advisor about your options.

STARTING A HOUSING FUND
Everyone dreams of their own roof over their heads, but properties always seem just out of their budgets. To overcome this challenge, it’s important to start setting aside money for your home down payment. When you buy property, typically about 80 per cent can be funded by your bank, and the rest — including the additional 10-20 per cent costs of registration, stamp duty, furnishing etc. — must come from your pocket. With regular savings, you can achieve this.

INVESTING FOR CHILDREN
The best time to start investing for your children is as soon as they are born. Education inflation is steeper than regular inflation. Invest Rs 5,000 per month in a mutual fund SIP for 18 years with an annual returns expectation of 12 per cent gives you a corpus of Rs 38.3 lakh, which will help cover your child's higher studies.

HAVING A TAX PLAN
Why pay taxes when you can legally reduce your tax liabilities? Ensure you’re invested adequately in tax-saving instruments, and that your investments are tax-efficient, which means having to pay low tax rates on your investment returns. Lower taxes means higher returns, which means you achieve your life goals quicker.

Speak to a tax consultant on the best ways to lower your taxes. Money is central to your goals, and money decisions cannot be side-stepped. So take these decisions before you turn 35 and give yourself a strong platform for financial growth.