As a young engineering student in Ahmedabad, Harsh Vibhor Singh had watched his lecturers sitting in protest for higher post-retirement benefits. It turned out to be a valuable extra-curricular lesson on the importance of saving money and making a long-term provision for future needs.
When he started working, one of the first things the software engineer did was to educate himself on the opportunities for small investments that would grow handsomely by the time he retired. “I conducted extensive research on investments and the risks associated with them, which gave me confidence (to start investing).
I started investing 15 per cent of my salary as soon as I got a job in an information technology company. I plan to increase the amount every year,” Singh, 24, tells Happiest Health.
His knowledge of the market within a year of getting a job, and at an age when many of his peers could be splurging their allowances or salary on their objects of desire, is evident. “(The investments) happened after I gained some confidence from paper investing and compared those returns with top mutual fund returns and Nifty returns,” says Singh.
Aman Kumar, now 20, is an undergraduate student at Christ University, Bengaluru. He says he began investing his spare money in October 2020, soon after he turned 18.
To this day, he invests half of his income – coming in variously as funds from his parents; a daily allowance of around Rs 500 for college-related expenses; and personal savings made from the two.
“There are several financial influencers who have openly made the concepts of investing very clear. Their tips are easily accessible through Instagram reels, YouTube shorts, and videos. They caught my attention,” he adds.
The right time to invest
Karthik Rangappa, vice-president of research and educational services at Zerodha Broking, strongly suggests not waiting for a perfect time to make an investment. “Start with investing a simple amount of Rs 500. The key is to just start.” Rangappa suggests that the ideal time to save is when one starts earning.
Neha Nagar, founder of the Greater Noida-based TaxationHelp.in, a legal help platform for businesses, also believes that the habit of savings and investments should start from one’s childhood.
She says that is the time when a youngster can learn the value of saving, spend smartly, and appreciate the importance of financial freedom. Over time, these values would become the individual’s core values that would build a solid financial foundation.
Time to save more, spend less
For financial adviser, Ameet Chandan from Delhi, planning and discipline are two major factors for effective savings. “Always make it a habit to save some amount based on your income and expenses and stick to that plan.” Both Chandan and Rangappa agree that saving depends on individual cases.
“What works for one person may not work for another. It’s very important for individuals to weigh their respective family situations and lifestyles and then arrive at a plan,” suggests Rangappa.
Even eight is right
Money management and financial literacy, says Kumar, should be taught at a very young age. “I was introduced to pocket money at the age of eight. Money management has been important to me since my pre-teen years. And now, handling and managing money has become easier,” he says.
Singh recommends saving or investing as soon as one has a source of income and surplus funds that may not be needed for at least three years.
Parents can foster thrift
For adults, exposing their children to the practice of thrift – namely saving and investing money prudently – at an early age is essential. But parents should also educate themselves before teaching their children to save.
“Don’t teach your kids about saving and investment or enforce it in a boring manner – but in normal, casual conversations. As you expose them to it early, they become open to saving, investment, and many other aspects of finance,” suggests Rangappa.
Kumar says, “My parents had a policy: if I wanted an expensive toy or gift, at least half its cost should be contributed by me through savings. Parents should allot a fixed amount to their wards as daily allowance, be it for commuting, food, or others. It teaches them to wisely control expenditure (later in life).”
The fiscal prudence that Kumar has gained from early exposure is interesting. “I bore half of my college fee which was around Rs 80,000.”
