Families with double earners can utilize their disposable income in a planned manner to achieve most of their financial goals. Most millennials prefer both the husband and the wife to wok and share costs, unlike their predecessors. However with the high level of income, also comes the urge to overspend which might make way for a debt trap. The following tips will go a long way in being careful with spending habits and sticking to one’s budget-
- Save and invest: Despite the common risk-taking appetite and the market doing well, it is not a good idea to invest all your money in stocks and equity mutual funds. All the short-term goals can be funded using fixed income investment options such as bonds, fixed deposits, and bond funds. For long term goals such as retirement, invest in equity funds and balanced funds.
- Buy a home: Home buying is often the biggest goal of a typical Indian. Buyers can opt for large home loans due to the steep pricing of most houses in cities. Experts often advice that the home can be bought in a joint name that enables the buyer to enjoy the tax benefit fully.
- Career : You might choose to learn new skill sets or take the entrepreneurial route, so it is always advisable to take a calculated risk. You can also consider putting in place your emergency fund- at least three years worth of expenses in safe fixed deposits along with adequate life and health insurance. If you do not have to shoulder much responsibility, and your partner is keen to support you, then you can take the plunge.
- Retirement : many people do not plan their retirement while young, which can be disadvantageous in the long run. However, ideally double income families with no kids should look at retirement as one of their significant financial goals. Besides, it is also crucial to start preparing for it in time if they are considering an early retirement. You may also want to bring down your risky assets as you near your superannuation age.