Break the inertia:  Government schemes can get you on the  road to financial security, even with limited resources

inancial security is nothing but making sure people ‘plan’ for their—and their families’—future needs in terms of basic necessities, comforts and luxuries by judiciously choosing long-term savings and protection plans. Each of us has different types of family responsibilities and, more important, unique earning and spending levels. So if you want to ensure that your future lifestyle needs are met and protected, you must aim for financial independence and security.

“I earn well enough today, why bother about tomorrow?”

This is one of the most common questions I get to hear. It may sound logical at first; however, two important factors need to be carefully considered that make planning not a luxury but a necessity: Inflation or future rise in prices; and natural progression of needs, with either aspirational upgrades or increasing family responsibilities.

“I barely meet my expenses; hence, I cannot plan”

This is the second and very relevant point to address  for a financial planner like me. In today’s times, with the rise in real-estate prices, rental rates and overall cost of living, especially in metros, a large chunk of one’s post-tax pay goes towards meeting EMIs and personal spending. Interestingly, the new generation of Indian consumers has also shed the conservative attitude towards taking loans that their parents may have had. This gen-next  is not averse to borrowing (with high credit card spends)  to meet their present-day aspirations; including ownership of high-end vehicles, foreign trips, and even liberal personal spends. This is leading to an interesting impact: lower ‘net savings’ despite rising levels of ‘gross earnings’. If one does not strike the right balance, there is a risk  of financial imprudence—essentially, one will never  be able to make a meaningful plan to attain future financial security.

Act now
All considered, it is my firm belief that we should all do the following:

• To begin with, break the inertia and optimise your limited resources.
• Something is better than nothing—so start small, but do start.
• If you can’t immediately provide for everything, identify your most critical priorities; for instance, life protection, medical coverage,  pension creation, etc.
• Once you decide these, there are several lowcost options from not just the private sector but government-sponsored welfare schemes too.

A good start would be to take advantage of these government schemes and later aim to participate in private-sector offerings. It is also a good idea to suggest these to other deserving people who may not be financially savvy