Benefits of investing early in life:You will have over ₹2 crore more money left by the time you retire

At the age of 25, most people are focused on their careers. This is also the right time to lay a strong foundation for financial planning. Making the right financial decisions at this age can help build a substantial fund in the future. Many young people start spending and saving without any planning once they begin earning. As a result, they are unable to plan in time for their future financial needs. However, developing the right financial habits at the beginning of one’s career can strengthen financial security in the future. Today, we will discuss the right financial planning. We will also find out- Expert: Jitendra Solanki, Financial Adviser, Ghaziabad Question: Where should one begin financial planning at the age of 25? Answer: Understand this through the pointers: The earlier you start investing, the greater the benefit of compounding you will receive. This helps build a large corpus over the long term. Question: Why is it important to set financial goals before starting to invest? Answer: Understand this through the following pointers: Question: Why is it important to prepare a budget before starting to invest? Answer- This gives an accurate assessment of income and expenses. A budget helps determine how much money can be saved and invested each month. See the graphic- Question- What is the 50:30:20 rule? Does it apply to everyone? Answer- It is a popular budgeting rule. It is a simple way to divide income between needs, wants, and savings and investments. Under this rule- This rule helps maintain a balance between spending and saving. Keep in mind that people with lower incomes or major financial goals may need to adjust this ratio. Question: What is lifestyle inflation, and how can young people avoid it? Answer: When a person increases their spending as their income rises, it is called lifestyle inflation. As a result, savings and investments do not increase at the same pace despite the rise in income. Young people can avoid it by adopting certain measures. These include- Question: How can the misuse of a credit card derail your financial roadmap? Answer: Understand the consequences of misusing a credit card through these pointers: Question-What is an emergency fund? What is the minimum emergency fund one should have at the age of 25? Answer-An emergency fund helps you deal with sudden financial crises. In such a situation- Question-How much difference can it make to start investing at the age of 25 rather than at the age of 35? Answer- ‘Time’ is the greatest strength in investing. If you start investing at the age of 25, your money gets the benefit of compounding for 10 additional years. These 10 years can create a difference of crores by the time you retire. Let’s understand this with an example: Understand the details in the graphic: Question-What is the difference between an emergency fund and investments? Answer- Both are essential parts of financial planning, but they serve different purposes. An emergency fund is created to cover unexpected expenses, while investments are made to grow money over the long term, build wealth and achieve financial goals. Understand the difference between the two in the graphic: Question- What investment options may be better at the age of twenty-five? Answer- Starting to invest at this age gives you a long investment horizon. Therefore, you can choose different investment options according to your financial goals, risk appetite and investment period. See all the options in the graphic- Let us understand this in a little more detail- ********************* Graphics- Aayushi JAIN