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      Life has various stages and one of the most awaited in everyone of our lives is when we start our own financially independent life. It really feels great to attain this stage but this is also a stage where our responsibilities start showing up. It is very important to lay-out a clean financial plan of what is going to fall when and how we would be managing it.
      At this stage of life, where your age is 25, if you think that it would be difficult to really predict and plan for the future, trust me it’s actually not true. What we are typically planning here is how to meet the financial needs at each of the different stages in life and not how to become wealthy.
      The different stages in life can be something like, marriage, children, their education/marriage expenses, your retirement, etc.
      Saving a few thousands monthly can help meet all the financial requirements at all these without any stress. And, even though your income increases year on year, with your early planning, your investments would keep on decreasing. This also help your other ways, like when you buy a house/car and you have bear additional EMIs, even then you would be smoothly be able to honour your responsibilities. This can be demonstrated by a simple table as under:
      [​IMG]
      You can download the excel sheet from Google Docs or Skydrive [link provided at the end of the document] for you to play with and understand. The cells in green can be changed as per your requirement and the rest is calculated automatically.
      In addition to this, you should also keep in mind your insurance needs. This is also very a important aspect. However, please note that insurance should be a pure risk expense and not an investment tool in your planning. The following insurance guide may also be helpful to you:
      1. Life Insurance: You should buy a term insurance very early in life and for the maximum period available and keep on doing top-up as and when your cover needs to be increased, this helps in reducing your premium. The cover should ideally be around 5 times your annual earnings.
      2. Health Insurance: With such steep increase in health expenses, you should not miss covering yourself and all in your family with a proper health insurance policy.
      Please post your comments incase of any doubt you have and I’ll try to help you.
      If you like this article, we have the option for you to be able to share this with your friends and families through your Facebook, Google, Twitter & LinkedIn accounts.
      Cheers, Gopala Subramanium

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