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Thursday, July 19, 2018

3 things to do in 20s to avoid going broke in your 50s

While monthly busts are relatively easy to deal with, life shortages are calamitous. Here’s what you should do to avoid being broke in your 50s.

Updated: March 15, 2017 3:18:43 pm

You are in your 20s and life is going on smoothly—you have a good job, you are in the pink of health, you work hard and party harder! In other words…all izz well!

It’s a state of mind when you say “What? Me worry?” But, wouldn’t it be great if you could say for sure that there’s no need to worry, now or in future? While having a lot of money doesn’t ensure peace of mind, the lack of it certainly creates tremendous mental unrest—like the time you go bust by the 20th of the month and wait for payday.

While monthly busts are relatively easy to deal with, life shortages are calamitous. Here’s what you should do to avoid being broke in your 50s.

Get Insured: Yes, we know this sounds weird, especially when you are young and carefree. But, the very fact that you are at an age where life is mostly about taking risks and enjoying is reason enough to consider our advice seriously. Let’s put this straight. Insurance is the biggest protector from life uncertainties of most kinds—right from accidents to unfortunate, untimely death.


Here’s how insurance policies help. Term policies can give your family a big cover for a very affordable sum of money every month. For a cover of Rs 1 crore, you need to pay only Rs 18 a day for the next 30 years—a price less than your favorite cup of branded coffee! This is assuming that your current age is 25 and you will pay the premium (Rs 535/month).

Endowment policies help you earn steady, safe returns along with a life cover. Then, there are dedicated policies for retirement & for life goals like home purchase, kids’ education and so on. The variety is endless.

How does this tie in with going bust at 50? Simple. Once you take these protection covers early in your life and buy policies oriented to your goals, you not just ensure yourself a life protection cover, but also accumulate money to tide over temporary mid-life crises of the financial kind.

Watch your pocket and live healthy: You have two credit cards, and they are the perfect gateway to splurge, party and wear the trendiest clothing—alas, you haven’t thought of how you will pay off the credit card bill. The important point to understand – when you follow the mantra of ‘Live in the moment’ is that not all moments are happy if you don’t plan in advance. This is not about being stingy. Each time you spend, you take away your ability to put that much money for growth. And, we know that even little amounts put away regularly over a long period add up to a huge amount in what experts call ‘systematic investing’ and the ‘power of compounding’. Once you invest regularly and are disciplined in not withdrawing the money, the return you earn also earns a return.


For generating good returns over a long term, you can also consider HDFC Life’s Unit Linked Insurance Plans (Ulips) like HDFC Life Click2Invest – ULIP and HDFC SL ProGrowth Flexi. These plans offer you market-linked returns, charge you minimally, provide your family with valuable financial protection and best meet your investment needs. HDFC Life offers you a variety of ULIP products depending on your risk appetite and financial goals—be it for your retirement planning, child’s education or marriage or for investment purposes.


Medical emergencies do not cripple just physically, they also cripple financially. A healthy life ensures you don’t spend money on doctors, hospitals and medicines, leaving you with more to park away for the future. Buy medical insurance and health oriented policies that provide cover against critical illnesses & even expenses that arise after treatment of those illnesses. Check out HDFC Life’s health plan to get an idea of what we are suggesting. There is nothing more reassuring than knowing that all future treatments and expenses arising out of illnesses will be taken care of by someone else.

So, go ahead, live life to the fullest, but do all of this keeping in mind your ability to spend now…and even later! Which brings us to the next point.

Invest regularly and plan for retirement: Heard of the old cliché, save for a rainy day? Well, we’ll take that a step further. Why just save for a rainy day? Save enough to enjoy your favorite tea and snacks too! If you are in a private job, chances are that you will not get pension. The imperative, and actually quite easy, thing to do is save smartly in youth for your 50s and the life thereafter. The key here is to be ‘smart’. Scroll up, the first thing we told you about was insurance. Interestingly enough, insurance can be of great help for retirement too! Invest in ULIPs to retire with a good chunk of wealth!


Mutual funds, employee provident fund, post-office instruments like PPF, NSC, pension schemes like NPS are all very attractive options to get rich as you get older. As we mentioned earlier, squirreling away small amounts of money regularly can generate a big sum as you gear up for life beyond 50. The great thing about this? You can live life at 50, as if you were in your 20s and have enough to spend even after paying the bills.

Apart from helping you generate an adequate nest egg for your golden years, retirement plans by some companies like HDFC Life also provide insurance cover in a bid to give financial protection to the policyholder as well as the nominee. So this is a double treat for those looking for good return as well as financial protection.

Get hold of a financial planner and put all your worries to rest to enjoy a happy life!


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