Moneycontrol
Last Updated : Mar 08, 2018 05:07 PM IST

Financial advice from an elder sister to a younger sibling

The following article is an initiative of HDFC Life and is intended to create awareness among the users.

Throughout our lives, we learn from each other, other people’s mistakes, experiences and wisdom. We are constantly on a learning curve, which makes it easier for us to take life decisions. In financial matters too, we look for handholding and a guiding path, especially during 20s. And who else can be better teachers in wealth management than the ladies of our house?

Yes, women have been mastering planning and budgeting since generations. Our grandmothers and mothers are adept in planning the monthly budget as per the family’s needs-be it grocery or other household items. Despite huge expenditure, they still save money for emergencies or certain financial goals.

Likewise, investments and tax planning are no different from budgeting. It involves saving and investing in different instruments to achieve short-term and long-term goals.

In a bid to impart her learnings in financial matters to her sister, an older sister wrote a heartfelt letter:

Dear Swati,

Congratulations on your new job! You’ll be stepping into the professional world now and I am as excited as you are. This is your first job and I am sure you will shoulder the responsibilities with aplomb. As you will be earning now, I want you to take up another responsibility now which is financial planning.

Remember, that pink piggy bank you had when you were 5? You would put whatever money you had in it. It is time to step up now. In order to lead a financially independent life, you will have to take certain decisions for yourself.

You should identify short-term and long-term goals such as going on an exotic vacation, buying a car for yourself, maintaining a good lifestyle even after retirement, pursuing your passion, etc. This is the age you can save as you don’t have any dependency.

Like you save for your smartphone and laptop, start saving for your future. You have to save for investments, health and retirement.

You will see how your savings will grow into a huge corpus, which will come in handy in future. And, don’t put all your eggs in one basket. Diversify your investments in FDs, Ulips, Shares etc.

Likewise, a health plan is very important. Remember when I had met with that minor accident few years ago? It was my health plan that helped me. I will suggest to buy a health plan as it is important. It will immune you from any financial distress in case of any ailment.

Also, start a term life insurance policy. Get insured. As you plan to work, you have to take up a term insurance policy and become financially empowered. Your term insurance policy will be beneficial for your family in future. You will save taxes too and this saving can be invested again.

I am writing to you so that you don’t take financial planning lightly.

Yours,

Didi 
First Published on Mar 8, 2018 03:09 pm
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