You can start your personal financial planning from the moment you decide to. That moment is ‘NOW’. If you start at a young age then you can plan well & get maximum returns later.
I would advise anyone to ‘Start Personal Financial Planning At the age 18’. I understand that at this age you might be pursuing Education and you don’t even started earning a single penny. But, there are many ways you might be getting money at this age such you must be getting some pocket money from your parents / guardians for your monthly expense OR you might be earning money from a part time Job while continuing your education OR you might have left studies & started working somewhere to support your family needs.
At 18 you are quite mature to take your Life’s decisions And of course this is the minimum age criteria when you can open your bank account & start investing in most of the schemes. But most of us don’t understand the importance of saving and investing money.
In case if you miss this age then don’t worry you still got a chance to save NOW.
Roughly, I would say Starting your savings and investments in 20s, 30s & 40s would give you maximum benefits in next years. Well If you are in your 50s or 60s then you must have experienced/explored most of Financial stuffs and could start saving for retirement if you haven’t done already and enjoy your life by spending money that you have saved .
So, We are now starting our personal Financial Plan from the day you become 18 years old. After opening your bank account first thing to invest money is in Public Provident Funds .
There various stages in Life when you should open & start investing money in Public Provident Funds account.
- When you turn 18+
- When you get your First Salary
- When you get Married.
- When you have a Baby
Do you know that you can open PPF account of your child as soon as he/she is born!
Why PPF first ?
- PPF gives you interest rate around 8% (FY 2016 – 17 = 8.1%.)
- Annually Minimum amount to invest is Rs. 500/ – & Maximum
- Income Tax benefit U/S 80C
- Interest earned is Tax free.
- You can withdraw Partial fund from the 7th financial year onwards
- You can get loan against PPF account.
From Point 5 you can understand that if you invest some amount in PPF at the age 18 then after the age of 25 you can withdraw partial amount if you need. At 25 you can use this partial money for down payment of your first Home or for your or siblings Marriage or any other need you have. Now imagine if you have opened PPF account at the age 25 or 30 then you will have to wait next 7 years to actually get some partial amount from PPF. So, Does this make sense ?? Sooner the better
Note that if you Spend Money extravagantly at young age then it gets tougher to save money later. So, Save First Spend Later.