Invest in yourself: Health is wealth. Instead of wasting money by visiting pubs, join a gym, eat healthy and inculcate a healthy lifestyle that will keep diseases away.
Develop saving habits: It’s always better to start saving early so that you may start investing for your future needs. If you follow a healthy lifestyle, your wasteful expenses will get automatically reduced and you will be able to save more.
Emergency fund: Once you start earning, your financial obligations also start. So, you should build an emergency fund, so that you may fulfill your financial commitments even if there is a disruption in your earnings.
Invest aggressively: With a long earning career ahead, you may afford to take short-term risks and invest in equities for higher long-term gains.
Insurance cover: To secure the life of dependents financially, especially after marriage, you should take adequate life insurance cover. To protect your investments, you should also take health insurance cover and also cover other insurable assets to minimise liabilities.
Child education: One of the fixed financial goals of your life would be child education. So, you should start investing early to accumulate the fund.
Manage EMIs: You may have to take loans to acquire assets like home, car etc. However, you have to ensure that the cash outgo on account of equated monthly installments (EMIs) should not exceed 50 per cent of your monthly income.
Investments: Keeping EMIs within a managable level is essential to ensure that you may continue to save and invest. With around 30 years of earning career left, you may continue to take short-term risks for higher long-term returns.
In your 40s
Financial goals: Evaluate your financial goals and assess which goals have been achieved and are yet to be achieved. Prioritise the goals that are yet to be achieved and make investment plans accordingly.
Prepare for retirement: Retirement is one of the financial goals that can’t be avoided. With many other goals already achieved, it’s the time to concentrate more on retirement planning. Allocate major part of your savings to build retirement corpus.
Investment: Gradually increase the proportion of debt in your investment portfolio. It will reduce the market risk due to lower equity exposure and will give stability to your portfolio.
Borrowings: It’s time to repay the loans and avoid taking fresh loans. Even if you need to borrow, ensure that you avoid expensive debts.
In your 50s
Health: With age, comes the diseases. Along with adequate health insurance cover, build a separate fund for health emergencies.
Stable portfolio: It’s time to give priority to stability over return. To avoid fluctuations in the value of capital invested – depending on market situations – start shifting your investments from equity to debt.
Loan: Repay all your loans and avoid big purchases that require fresh borrowings or making payments through EMI mode.
Retirement fund: Manage your finances well to ensure that you don’t have to liquidate your retirement funds and you can maximise your retirement corpus.