Importance of financial planning for a 20 something

“Wait! What? Why are you doing homework? Didn’t you say you were done studying for a long time? You’re working. Isn’t it?”

Yes. I said that. I am not studying. I work. But I still have serious homework that needs to be done. Ever since I stepped out of the carefree college life, I have been burdened with the most unpleasant task an independent person needs to do – managing the finances.

How to pay taxes?

How to spend my money wisely?

How to invest it?

Which are the best methods to save/invest my money?

How to get started with that?

Trust me! I have asked these questions to tens of people. I have talked about housing loans, personal loans, credit cards, current account and mutual fund investments. And a lot of them are like why are you in such a hurry? That’s the first question I heard when I asked about a retirement fund. Planning about retirement in your 20s… Is it so unbelievable?

Then I see people rolling their eyes when I talk about working on some financial investments for my kids. I agree! I am not married and won’t be for a long time but is it too bad to be prepared? Is it too bad to have a detailed plan about everything in your life (or just trying to have it)?

When I did the post about why am I collecting books for my kids, I got the similar reaction. I was never asked to read books by my parents. Similarly, they never bothered to invest their money anywhere. For them, fixed deposits were the best way to save money. And if you know a bit about those, you would know they are a clear loss in the long term.

Wish my parents knew that then!

I am thankful to my parents for they openly express the mistakes they make. They never try to hide it. And those are the clues for me to make sure I don’t do that with my kids (When I would have them).

Why being prepared is important?

If you’re thinking these are just pointless musings, no. There is a really important thing which I need to discuss today. So, it all started with when I saw this video.

The video shows how there is a huge difference between what kids want to do with their life and what their parents want. And this difference in thoughts is bound to become a financial issue at some point. The video is actually a part of a brilliant campaign to inform parents about this and make them act as early as possible. (Find more about do your homework campaign)

This video was so to-the point. There’s always a huge difference between what you want from your career and what your parents want. Look at me! I am still looking for a way to dump those books I bought for preparing for a civil services exam. My parents wanted that for me. What I wanted for myself is build my own business, which doesn’t come free. I had longed of studying a bit more about business, management and marketing.

But decisions of doing one more degree comes with a huge financial burden. You can’t just slip your hand into your pocket and come up with lacs of notes. Does that ever happen? (It can’t happen even with a billionaire, you see. You can’t fit in tens of lacs in your trousers pocket.)

Therefore, it is very important that one stays prepared for such situations. It is important to do your homework on time, invest your income rather than just spend or “save” it and the right time is now. If you’re young and have just joined a job, start planning for financial investments. If you’re just married (which is the case with almost all of my college friends 😥 ), start investing for your child’s future. If you think it is too early now, you would never realize when it will get too late. So, why not just do it?

Tell me about your thoughts. Do you think proper financial planning is important for a person’s personal and professional success? What are you doing to ensure that?