It is no hidden truth that most of us fight hard in our day-to-day life to fulfil our financial demands and objectives. Be it helping aging parents, paying college fees, taking care of other mandatory expenses, your pursuit to prioritise funds for your retirement just seems to fade away with time. Unfortunately, you cannot allow that situation to occur and fortunately as they say, a stitch in time saves nine. This means that you need to correct the situation before it goes out of hand. Thus, you need to master the art of balancing your financial priorities to save more for your retirement. Remember, you are not just responsible for your children’s future. You are simultaneously and most-importantly responsible for the future of your spouse and must make all attempts to make your spouse’s retirement as pleasant as yours, if not more pleasant.
Here are a few tips that could help you in this regard:
- Make effective use of any bonuses, extra income, or goodies
Parties, eat-outs, lunches, exotic vacations, and lifestyle expenses are all excellent. These provide you with a temporary sense of happiness, which evaporates into thin air in no time and you are left with your empty pockets, pondering where you will get your extra income from. I am not suggesting even for a second that you do not spend on any of the above. All I am saying is that whenever you get any bonus or extra income ‘prioritise’ your expenses to save more for your retired life. Learn the art of balancing your expenses based on your retirement goals. For instance, where you can manage with a small holiday at Lonavala at a 3-Star resort, do not plan a full-fledged trip to Seychelles or Mauritius, even if you can afford it. Believe me, save the extra part, you will get your Seychelles or Mauritius trip in future, but more importantly, while saving for your retirement.
Invest a major part of any bonus or extra income that you receive in your retirement savings plans. This way, you will get the best of today while ensuring a great tomorrow for you and your spouse.
- Adopt a balanced approach in terms of lending a helping hand to your children
You love you children the most in this world and their happiness means everything to you. Therefore, it is absolutely natural for you to help your children financially, especially during their growing days when they are struggling to make ends meet. Moreover, you may have to take care of the expenses of your aging parents.
Please remember one major thing here that over generosity can impact your overall retirement plans and savings very badly. As far as your children are concerned, once they grow into adults, ask yourself if you are actually helping them a lot more than you should. You might end up suppressing their ability to grow on their own into a stronger and competitive human being. Let them stand on their feet, realise the importance of earning for a living, and understand what it takes to maintain a good lifestyle. Yes, as parents, whenever in trouble, remember you are always there for your children. This attitude will help you build strength in your children to face adversities of life while enabling you to save for your retired life.
In case of aging parents, please work out the extent to which you can contribute towards helping them. It is not advisable for you to spend so much on your aging parents that you hamper your own retired life along with that of your spouse. Balance is the name of the game and proper financial planning will get you there.
- Ensure that you constantly keep an eye on diversification of your investment portfolio
Asset allocation plays a major role in maximising returns from your investments. Thus, please keep a constant eye on diversification of your investment portfolio. This will help you immensely in spreading your risks and in saving towards a strong and secure retirement. For instance, your risk appetite might keep on changing with time. Therefore, you need to keep on adjusting your asset allocation mix based on your overall retirement goals and your risk propensity at that point in time. As you grow, you can start looking more towards PPF, FDs, and other pension funds and reduce your exposure to equities.
Remember, the best time to start planning for your retirement is now. In case you need any assistance, please do not hesitate to contact a financial planning expert who can guide you perfectly based on your plans.
Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing.