Unless you are a spendthrift and just started a salaried career, then you already are facing a financial challenge at hand. You have no money left to pay your loan EMIs and the due date is tomorrow, chances are you will start to experience a bit of financial stress tonight.
For some millennials like you and me, a financial challenge could mean different things. Your swanky new car is giving sudden problems; your girlfriend’s birthday is in 3 days and you have no cash to buy her the Burberry clutch she so admires. The implementation of GST is another financial challenge on the horizon. Your plan to purchase a luxury sedan will make you re-consider the idea.
A financial challenge can throw your financial planning out of the window. Wedding cards are distributed, whole planning done, but the bonus that was supposed to come is delayed. This is a valid reason to worry. The house needs repairs, a relative needs hair transplant done, colleagues in your team decide to spend the next week in Spain, how can you get the quick funds needed to fly to Spain?
All these ‘Ifs’ and ‘Buts’ build anxiety inside of us. We want our finances to tread its own path, manage itself and leave us with no worry. That cannot happen. To overcome recurring financial challenges we need to study, understand, plan and execute our financial plans. Let us look at some challenges we face and how to overcome them.
- Lack of Savings
Your lack of savings turns into a financial challenge when you are not able to pay for the monthly groceries, spend for the regular doctor’s checkup, struggle around for emergency funds in case of an emergency, pay for utilities like electricity bill, rent, vehicle fuel, mobile and internet charges etc. If you are spending more than what you earn or maxing out your credit cards, then you need to look at your spending habits closely. With such a spending habit you will find it hard to make any financial savings and hence face a financial challenge. It is also important that you gain knowledge, talk to experienced people in your family about how to take on financial challenges.
- EMIs towards loan
Most millennials like you and me look at loans as an instrument to get our dreams fulfilled. Whether a car, a home, a diamond ring for your girlfriend, pay for expenses online, travel the world or spend for your dream wedding, loans give us the chance to fulfill some of our lifelong dreams. Now on one side it may look all rosy, but the flip side sees us sometimes struggle to get our loan EMIs paid on time. With no savings in place, there can be dependence on multiple loans, which could result to piling of debts.
- Credit Card Balance
Being credit card users help us to pay for expenses on the go. You don’t need to move around with your hard cash inside a bulging wallet. You can pay online or at POS terminals with credit card issuers constantly coming up with offers and rewards to make you spend more and avail multiple or supplementary credit cards. Credit card debt is a financial challenge in two ways. First, getting out of debt itself and second, ensuring you improve your income to expenses ratio and don’t fall into credit card debt again.
- Job Relocation
It is always wise to remain at a single company for as long as you can. This not only helps improve work experience but also keeps your income running without a glitch. Many a times, ambition gets the better of us and we decide to relocate to learn and earn more. But this can become a financial challenge when you consider the change you need to embrace in terms of standard of living, commuting expense, monthly expenses for rent, food and utilities. Of course, you can apply for a loan to fund your re-location from a digital lending platform. The quick personal loan can easily help you to fund the expense for shifting, purchasing furniture, required home appliances etc.
- Investment Decisions
A financial challenge that needs your ‘crystal ball’ gaze is investments. Some of us are lured by the returns offered by Mutual Funds or the stock market. These returns can be directed towards a financial budget, pay off loan EMIs etc.
- Retirement Dilemma
As a salaried individual now off course you are not thinking of retirement now. And you shouldn’t actually. There are far more important financial challenges and tasks to be done now than to think about something that will affect you further down the years. But do keep retirement part of a long term plan say before the end of 5-10 years because not thinking of ways to financially sustain yourself after your work years could turn this into an unnecessary financial challenge.
How to deal with Financial Challenges
Emergency fund – A good solution for facing sudden financial challenges, if you have set funds separately for an emergency, you are bound to be less worried, more optimistic and financially at ease as your monthly budget remains unaffected.
Prioritize your spending – Make a plan to ensure you are only spending on necessary things like food, rent, commuting, utilities, bill payments etc. Ensure you focus primarily on paying off credit card bills.
Get a personal loan – Personal loans are availed quickly and without hassle from digital lending platforms. You can avail it for a number of personal reasons like medical emergencies, travel, wedding, home improvement etc. But also remember to pay off the loan EMIs promptly so that you can build a positive credit history with the platform for future personal loans.
Invest wisely – A good way to invest your hard earned money is by digital lending. Instead of keeping your money idle in your savings bank account, you can invest it directly into a digital lending marketplace.