The Most Important Things To Buy In Your 20s

Posted by amrina alshaikh on June 12th, 2021

The 20s are the most exciting decade of most people’s lives. As a young, financially independent person, you are free to explore the world, switch jobs, take some risks and lead life the way you wish. But this decade also sets the tone for your future financial life, and the money habits you inculcate now will help you create wealth.

The following are the most important things you must get in your 20s:

#1 A ULIP plan.

The 20s are the perfect time to think about the future, since you already have a source of income and have plenty of time to map out your finances. If you want life insurance and an avenue that grows wealth for the future, you should invest in a good Unit Linked Insurance Plan (ULIP). The ULIP policy provides insurance coverage and invests a part of your premium in high grade securities. Once the ULIP matures, you get a large fund of money for future goals. ULIP plans are also tax deductible.

#2 Term insurance.

If you want a pure life insurance policy, then a term insurance plan is more up your alley. It provides life coverage at an affordable premium, while offering a large pay-out that protects your family in your absence. The best term insurance plans in India offer critical illness coverage and accidental injury benefits as well. Term insurance can give you peace of mind knowing that your family is taken care of despite the loss of your income.

#3 A house of your own.

Though realty prices are high in most cities, this is the perfect time to start looking for a house. The more you look, the more you will understand how the market works and which kind of house to choose. You can also juggle your savings and apply for a home loan after identifying the perfect house for yourself. It need not be a large house, but it will be your own and it becomes a big financial asset for the future.

#4 A vehicle.

Apart from a house, another good asset to own is your own vehicle. It could be a two-wheeler or a small car, but having your own vehicle increases your mobility like nothing else can. Using your own car is also helpful at a time when you are afraid of using public or shared transport due to the Coronavirus menace. Choose the car that best fits your budget and look up suitable financing options.

#5 A dedicated savings account.

A part of your income must be saved for the future, and this must happen every month the moment you receive your salary. Set up a separate savings account to deposit money in, and never withdraw from it. Once the savings reach a certain threshold (say, Rs 50,000) you may invest it in short term options like recurring deposit or ELSS or liquid fund to grow it faster. The more you save, the more money you have at your disposal for emergencies.