5 Financial Priorities for young people

Priority means putting the primary needs in top priority compared to other needs. Usually these primary needs are precarious and cannot be postponed. In priority, most of young people still tend to be against the rules and want to prioritize what they want.

Hundreds of items, hang out places, socialite activities style, and all of which require money are usually on top of their shopping list. Instead of saving money, young people usually tend to spend money. Especially, for those who just have a job and can make money for the very first time.

Here are five priorities that should be implemented since the first time of young people to work or receive income:

1. Emergency funds
Collect the saving funds for some 3-6 times of your monthly income. The purpose is to anticipate the possibility of temporary interruption of income due to termination of employment. If young people can allocate 50% of his income to establish an emergency fund then within 6-12 months will reach its quota.

2. Funds for marriage
Collect the saving fund for 6-12 times of the monthly income. This is to anticipate the possibility of getting married at any time. If young people can allocate 50% of his income to establish a marriage fund then within 1-2 years will reach its quota. Do this after the emergency funds collected.

3. Home
Collect your earning for 24-36 times of your monthly earning. The goal is to pay a down payment and other costs. The assumption is that most people cannot afford the cash to his home, then take out a loan (mortgage) at banks. If young people can allocate 50% of his income for a house down payment, within 4-6 years will reach its quota.

4. Retirement
Follow a pension program that can debit your earning on a certain percentage of 5% -10% of income per month since the first time you work and continue until age of 55 years when you are entering retirement. Accumulation of these period will generate millions, even billions of dollars for your retirement living.

5.Health
Buy a health insurance-only if your company does not reimburse the cost or does not have any hospital care program. This is especially for professionals and businessmen who bear his own costs of health. Allocate 5% -10% of annual income to pay health insurance premiums.

By implementing the five priorities above, young man is automatically prepare his old age pension fund and to be able to anticipate the financial risks with emergency funds and health insurance. Inability of financial concerns that often lead to delays in marriage can be avoided.

(image taken from:ncbm.org)

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