Your Financial Life Begins At 25

Let us look at five financial objectives you should achieve by the age of 25.

- Viral Bhatt

You are in your early twenties, you have just completed your graduation / post-graduation and you have been placed in a corporate company through campus interview. You join your first job and have already made plans on how to spend your first salary; in fact your first couple of salaries. This tendency to spend continues, sans any focus on investment.

It is not before long that you realise that you are 25 and you have not saved / invested any money (excluding tax-saving investments done during December to March) in the past few years of your professional life. There are exceptions to the rule everywhere we cannot deny any of a few being present in this category too. However, 25 may not be too late to start your investment journey, it might in fact be the perfect time to start.

Short-term versus long-term goals

Remember those times in school when you had this habit to study for your examinations and work for your projects at the last moment. In your professional career too, you would have the tendency to leave all your work pending until the day before submission. During your 20s, your financial responsibilities /goals are small and short-term in nature, such as planning for that vacation, down payment for a vehicle, purchase of furniture, etc in contrast to goals later in life such as downpayment for house property, children’s education, their marriage, etc. Short-term goals can be met easily by saving diligently for a couple of months and then spending again. However, when you reach the age of 25, you realize that slipshod work shall not continue for long.

A real life financial crisis acts as an eye opener

As they say, one has to lose money in the equity market to understand the way it operates; in the same way a real life experience teaches you what no financial planner would have been successful at making you understand.