- Keep your bank statements in perfect order. No bounced checks, no unplanned over drafts, no fines for minimum balance not met etc.
- Pay your taxes on time and have the ITRs in place. Banks usually check for last three years of ITRs but I am planning to have spotless ITRs for five years when I make my application.
- Have a stable professional life. Dont switch jobs every year. Banks make reference checks so it is important that you are stable in your job.
- Don’t have other financial burdens. A car can wait if a house is really what you want. Don’t have too many financial commitments when planning for a home loan since it will take up major part of your salary every month. You want to be able to buy food at the end of the day.
- Pre Approval of a loan. Banks allow a window period of six months for you to finalize a property after the loan is approved. Pre approval is a self assurity that you have the necessary funding. When you get a good deal you will not have to waste a lot of time to get the loan which will ensure you don’t miss the deal.
So I have almost reached mid twenties and it’s time I really put down my medium term (read 5 year) goals.
I know that the farther out you look, the harder it is to accurately determine outcomes or set goals, so I take these with a grain of salt. As life happens, and situations change, these will likely need to be updated.
So here is my list of what I want to achieve in the next five years.
- Buy a house: This one has been on the radar for a long time and I am sure most of you know about it already. I know I cannot do it right away but since I am done with my education, have a stable job and no debt, its safe to say that I can focus on it right now so as to achieve it till my 29th birthday and have it all up and ready by my 30th. Its a goal I think about every single day when I wake up. As I will get more established career wise I guess I will get closer to achieving this. Bear in mind that my getting married and staying in my hubby’s den has nothing to do with it. This goal remains to be fulfilled nevertheless. The good part is I am very close to having the down payment ready. Waiting for 2-3 years before I start the process will only give me time to build a good credit history and have a much more stable income for getting a house loan (In india you can get upto 10 times your salary).
- Build a rainy day fund of Rs. 5,00,000: So this one might sound odd but this practically means a portifolio (not including long term investments or the house) of this much amount which includes both liquidity and short term safe investments. I am pretty sure I will be able to do much more than this because I have a policy maturing in 2014 which will give me more than 60% of this amount just like that. Although, since I have other financial goals I have kept it to a realistic level so that its easier to achieve.
- Have a stable pension plan: Fewer people my age are focusing on getting a pension plan instead they choosing to have share and stock portfolios. I have a simple funda- don’t put your money in something you don’t understand. So shares and stocks are not a part of my financial agenda. Not for now atleast. I am looking around for a stable pension plan and I hope to have this one sorted till my 25th birthday next year in feb. What I have in mind for this plan is simple: Should mature on my 60th and give me regular income yet have the option of taking the corpus in lumpsum along with accidental cover.
I think that’s pretty much all. These have been there on the radar for a long time only I did not think I was in a stable situation to actually start putting my time, energy and most importantly money on them.
Some of you might think why a car is not on the list. Reasons below:
- Simply put : Its depriciates.
- Petrol prices are skyrocketing.
- Metro and Auto are tolerable.
- The car my parents gave me might be 5 years old already but it is in perfect working condition (except the shocker :D). Although, I don’t use it all that much so I think I am good where I am right now and I don’t want to put my money on a car. I might change my mind on that but so far this is what my thoughs are on buying a car.
I would love to hear your opinion on this so please leave a comment or two.