Non-farm jobs are undergoing a big change in India. The opportunities available in non-conventional sectors are attracting the young population.
‘The Jobs Report’ published by ASK Wealth Advisors states that in a year around a million jobs are getting added in ‘On The Go’ (OTG) sectors such as transport, logistics, e-commerce and warehousing. Such OTG employment opportunities involve high mobility.
These jobs make it essential for a large majority of the employees to travel inter-city and intra-city. Many jobs are blue collared by nature. Here are a few money tips that could be of help.
Learn net banking and cash-less transactions
This may sound very basic, but it saves a lot of time and acts as an enabler. If you are on the move, you may not have adequate time to visit the bank's branch. You may have to transact on the go. The best way to deal with this situation is to embrace technology. Learn to use app-based banking to go cashless. It lets you transact with ease but also reduces the risks associated with handling cash.
One must create an emergency fund
Many jobs are assignment based and contractual in nature. Some individuals are employed for a specific time period, say three months. What if your contract is not renewed? What if you do not get another job immediately after expiration of the contract? How about a situation wherein you have to spend a large sum on hospitalisation or for some other reason?
Creation of an emergency fund is the best way to resolve all these issues. You should at least have three months of expenses in your emergency fund. Start a recurring deposit to build your emergency fund. It should be your priority. An emergency fund ensures peace of mind and lets you focus on your work.
Buy personal accident and health insurance
Accidents can bring down the earning capacity of an individual to zero. Accidental death, dismemberment and hospitalisation are the three risks a young individual is exposed to. The best way to manage these risks is to buy adequate insurance. “You should buy personal accident cover of at least 60 times of your monthly income. For a 30 year old, health insurance cover of Rs 1 lakh should work. As you age, your insurance cover too should increase,” says Saroj Satpathy, executive director, Salasar Insurance Broking Services.
"If you are married, go for family floater health insurance. If you have two job offering a similar salary package, opt for an employer who is offering insurance coverage. It shows that the employer cares for you,” adds Satpathy.
Start investing – robo advisors can be of help
Employee Provident fund, National Pension Scheme and other avenues ensure that you save for the long term. However, for the intermediate financial goals, you will have to invest on your own in a mix of mutual funds, bonds, stocks and fixed deposits. That makes an asset allocation based approach a must. Given your busy schedule, one may consider opting for an app-based robo advisory solution.
This lets you invest on the move at your convenience. The smartphone-based apps let you track your portfolios in a live environment. More importantly, they are available at minimal cost. “Educate yourself about various aspects of investing in mutual funds on these digital platforms free of cost. The digital platforms also offer paperless know-your-customer (KYC) and systematic investment plan (SIP) and take care of other operational hassles, making investing easy through a mobile,” says Mohit Gang, chief executive officer and founder of Moneyfront, a mutual fund distribution platform.
Be a smart user of credit
Nowadays credit is available at the click of a button. There are many app-based lenders willing to extend loans as small as Rs 10,000. But don’t go for one just because money is available. “Educate yourself about how loans work before you avail of a loan. Do check the interest rates on offer. Moreover, pay back your loans because technology nowadays helps a lender to track you down and default destroys your credit score. This in turn closes doors to formal credit,” says Sukanya Kumar, founder and chief executive officer of RetailLending.com. Be a wise user of credit by asking yourself two questions. One, do you really need money and two, can you repay the loan? Honest answers to these questions will save you from landing into a debt trap.
Home loans and education loans are good loans and they can be availed when necessary. In all other cases, be careful with your loans.
Disclaimer: The views and investment tips expressed by investment experts are their own and not that of the website or its management. Users are advised to check with certified experts before taking any investment decisions. Moneycontrol.com