Everyone amongst us desires to be rich / wealthy or at least have a comfortable life financially. If any reader disagrees, I would beg to differ. In current times financial wellbeing is of paramount importance.

This becomes especially true for a lot of us who have seen the hardships of early life. With the economy changing, job opportunities improving significantly and far better salaries being the order of the day, it’s crucial that one plans his / her finances. You are in a far better position to put aside money for your future than your parents ever were. This will ensure you spend wisely & more important invest wisely.

Mind you, I have said “Invest” & not “Save”!! I will cover this difference in my subsequent articles.

Some key reasons to manage your money well or “make it work as hard as you work to earn it”

  • Provide for our family & our financial goals

All of us work to provide for our family –  home, food, education, entertainment / discretionary expenses, children’s foreign education / higher education, medical expenses, support our parents, follow our passions etc..

  • Retirement & Inflation

A 35 year old individual with a family spending Rs.50000/-   a month in 2015 will require Rs.2.2 lacs a month when he sets to retire at 60.

Assuming inflation stays at 6% and the individual lives until 80 years, he will require Rs.5 crore corpus at age of 60 to sustain his 20 years of retirement!! 

Surprised??

This is what inflation does to your expenses.

Retirement is a time where you will experience inflation but not an increment in your earnings. And this will increase every year. So unless you “Invest” wisely, retirement will be one hell of a difficult ride.

  • Life Expectancy

Average life spans are increasing. Thanks to medical advances we are going to live far longer than our previous generations. And if retirement age stays at 60 yrs.. you have a long time to provide for.

  • Nuclear Families and smaller families

Nuclear families are the order of the day. So there would possibly be no joint family support for most of us. This will be further compounded with smaller families, probably one or two kids. It maybe difficult for your children to support you completely.

  • Medical Expenses

As years pass this will only keep on increasing and will form a substantial part of your costs in future. Are you factoring this in your plans?

  • Absence of Social Security / Pension

Irrespective of the taxes you have paid to the Government, if you are laid off or have a tough time in retirement, you can expect no support from our Govt.

Wants are Infinite but money is Finite for most of us.

Unless you differentiate between needs and wants, you will always be playing catch up with your bills in current times!!

I am sure most of us are aware of these facts and its nothing new, but the question is have we done something about it? If you have, great, if not, it’s never too late to start!!