The need and importance of money are felt at every stage of your life. As a child, your piggy bank symbolises your first relationship with money. It teaches the importance of regularly saving small amounts to create a sizable amount that you can use in urgent times.
As you grow up, you continue to depend on your parents for your financial needs. However, if you get an allowance, your relationship evolves to the next stage. Rather than saving dimes now and then, you get a fixed income that you manage for your expenses. If you save and invest a part of your allowance, you can make a big purchase later when you accumulate a decent corpus. To save, you can consider investing small amounts in the stock market or start a mutual fund SIP. Managing your allowance teaches you to live within your means and save ahead for big purchases.
When you get your first job, whether a side job or full-time employment, you become more responsible with money. You learn the importance of earning money and becoming financially independent. You meet your expenses and even help your parents manage household expenses by contributing your income. However, as a young adult, you might have some responsibilities on your shoulders. As such, you can indulge in your desires and plan for your immediate financial needs. At this stage, you might also consider saving by starting a mutual fund or a stock portfolio and learning how the markets work more in-depth. Since you are young, you can take equity risks and allow your investments to grow with time.
As you get married and start your own family, the importance of money becomes more pronounced. Your financial responsibilities increase, and you start saving more. Your investments also grow as you plan to start your family. At this stage, you need to consider your risk appetite when investing in the market, especially stocks and mutual funds. You might think of the SIP investment route to invest in a disciplined and systematic manner.
After the birth of a child, you start saving for your child’s secured future. Your financial goals increase, and you might also consider investing in a home for yourself and your family. It would help if you diversified your investments too. Both equity and debt should be a part of your portfolio.
In your middle age, you become mature with money. You can efficiently manage your finances. Moreover, since some of your goals are already fulfilled, you start saving money for retirement. At this age, investing for retirement takes centre stage. You can opt for debt mutual funds or invest in large-cap stocks with a more stable outlook.
Retirement is the stage when the flow of money again becomes limited. If you have saved up a retirement corpus, your savings become your best friend and help you meet your lifestyle costs after retirement. You can opt for STP in your mutual fund portfolio and start receiving regular incomes at predefined intervals. You can also stay invested in debt funds to reduce equity exposure and enjoy stable returns. If, on the other hand, you haven’t saved for retirement, your relationship with money seems fleeting, as you don’t have sufficient funds at your disposal.
Though your relationship with money evolves with time and becomes more mature, it is on you how the relationship turns out to be - sweet or sour. If you manage your finances effectively, you can have an excellent relationship with money. On the other hand, not handling your finances properly might turn your relationship sour and leave you wanting, always.
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