TIPS PERSONAL FINANCIAL PLANNING

PERSONAL FINANCIAL PLANNING – IMPORTANT TIPS

Building an adequate corpus to meet your financial dreams takes more than a few years of contributions and there are significant benefits in starting your retirement plan early.

Invest early and stay invested

When it comes to retirement planning, it is never too early to start. The earlier you start and remain invested, more time and potential your savings will have to grow.

Compounding pays off

Compounding is when the money you earn from your investments is reinvested to earn even more. The earlier you start, the longer your money has the opportunity to compound to enhance your retirement corpus and achieve your goals.

Delay will cost you more

Delay in planning can have a major impact on your retirement corpus. One of the most important factors impacting how much your retirement savings grow is the length of time you allow your savings to multiply.

The bottom line is if you don't start saving for retirement early, it will be more costly trying to catch-up later. It is much easier to put aside small amounts of money each month starting at a young age than it is to put aside large amounts when you are older.

Make Saving a Lifelong Habit

One of the best ways to grow your retirement savings is to make a plan for regular contributions towards a retirement plan. Here are some ways savings may help you today and tomorrow:

Set savings goals for short-term and long-term. Use different accounts for short-term and long-term goals.

Don’t hold extra cash. Keep only that much cash in hand as you will need. The more cash you have in hand, the more likely you are to spend it.

Avoid using your savings. Do not dip into your savings except in case of contingencies. You’d rather cut your expenses than blow up your savings.

Use enforcement tools. If you are not a disciplined saver, use enforcement tools such as a recurring deposit attached to your salary account. A fixed sum will automatically get transferred to the deposit from your salary and hence get saved.

Consider starting to save for your retirement as early as possible.

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Brig Narinder Dhand,
Founder & Convener
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