How to Shape Your Financial Future by Being Proactive?
Guess how much monthly income you will need to run your house and live the way you do today 20 years from now? Given the high rate of inflation, goods and services are likely to be several times more costly than they are today 20 years from now.
Old age also brings health concerns with it which translate into medical expenditure so that will be another drain on your finances that you will need to account for.
Many people don’t have a regular source of income during old age either so you can imagine the amount of financial problem you might need to live with during one of the most vulnerable phases of your life.
Worried? You should be. The solution lies in being proactive about your finances which can make a huge difference to the quality of your life you enjoy for all times to come.
Plan for Each of your Financial Goals Today
In an ideal case scenario, the day you start earning is the day you should start saving for your financial requirements throughout the different stages of life. Don’t make the mistake of thinking that old age is too far away and you don’t need to plan for your financial requirements for that stage of life just yet.
As we have seen above, you will need a lot more money to buy the same goods and services you enjoy today around the time you retire so start saving for old age as early as possible.
Even small but regular savings can prove very beneficial if saved and invested over a long time period. Pension plans, especially government-owned ones are one of the best bets for ensuring a comfortable and tension-free old age.
If you would rather save for your old age through other safe financial instruments, then that is fine too. As long as you have the foresight to cut out on your expenditure today and keep regular amounts away for other future requirements, you can be in a comfortable financial situation, not just today but throughout your life term.
Be proactive and make a list of all your important financial goals today. Your child’s education, his/her marriage, your home mortgage prepayment, a corpus to pay for your pension income – most financial goals are common to everyone though you may have some additions or deletions from the list as per your own wishes and financial conditions.
After this, make a plan regarding how you plan to meet each of these financial goals. It could be as simple as making a separate Recurring Deposit account for each financial goal in your savings bank account or as adventurous as investing in a property whose price who know will increase significantly after some years.
Windfall Gain Saved
Rajat started working several years later than other people his age. He did a stint in social service, another one in politics and finally chose to settle down with a well-paying corporate career.
He knew he was lagging behind his peer group in terms of his financial achievements and also in terms of his career growth but he felt he did a good thing by dabbling in other sectors as those stints had widened his general awareness and perspective in general.
To make up for the lost income and career growth, he invested in a property in an upcoming area after doing a lot of research. His estimate turned out to be correct and the price of his property increased by over 100% in a few years.
Other people his age could have spent the windfall wealth he gained through selling the property on a bigger car or a foreign vacation but he chose to save the entire amount in a bank fixed deposit.
He knew that the total amount of the fixed deposit would enable him to meet all his future financial goals without any strain.
He enjoyed his youth with his income from salary and his golden years with a portion of the corpus he accumulated through the sale of the property.
Conclusion – Shape Your Financial Future
With the dynamic and changing economic scenario in the world today, very few people can be safe or confident about meeting their future financial requirements and goals. Being proactive and anticipating things is the need of the hour if you want to manage your finances intelligently.
The other option is getting bogged down and stressed whenever a financial requirement comes up during life’s important stages. Make your choice and shape your financial future accordingly.
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