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Follow These 5 ‘S’ For Financial Nirvana

Adhil Shetty

Going by its literal meaning, Nirvana represents the final goal of Buddhism. Simply put, it is a state in which there is no suffering. In contemporary times, suffering has many variants. Financial suffering is one of them and feared by everyone. Financial planning relieves us from this suffering. But without a plan our finances – and our lives – can go haywire.

In case you too want to attain financial nirvana for yourself and your loved ones, there are five ‘S’s’ which if followed religiously can take you to the state where there is no financial suffering.

Save — Lay The Groundwork Of Your Finances

Saving lays the groundwork of your financial planning. It should start as early as possible so that you can enjoy maximum benefits in your later years. Saving limits your tendency to splurge, and increases avenues for wealth creation. If you start saving early in life, you will have a greater number of years at your disposal to allow the power of compounded returns to grow your wealth at a faster rate in your later years. A 20-year-old with small savings can potentially save more than a 35-year-old with large savings, assuming both want to retire at 60. Hence, saving should be your first step towards financial nirvana as it will give you freedom and flexibility for achieving your goals.

Secure — Keep Your Family Safe From Death & Disease

The next big step is keeping your family financially secure in the event of your untimely death or a medical emergency. After all, financial nirvana can only be achieved if your loved ones do not suffer in emergencies. The best way to cover your family is by buying adequate insurance. To ensure a comfortable life for your family in your absence, a Term Insurance policy is a must. It works as an income replacement tool in your untimely death by providing funds to your nominees. Similarly, a Health Insurance would save you and your family from the rising healthcare costs in case of medical emergencies. Even if you have an employer-provided health policy, it is advisable to go for an individual cover as the employer policy could end at any moment. You can also consider a decent-sized family floater for securing your family medical needs.

Savour — Discover Yourself

Before retirement sets in and you are almost at the end of your debt tenure, it is time to gift something back to yourself. Whenever you get time and more importantly have funds, allocate some for things which increase your happiness quotient.  But do ensure that all debts are well settled and affordability of all the luxuries is based on your money potential.

Strengthen — Accumulate Assets, Clear Debts, Secure Retirement

Strengthen your savings through effective investments. This would mean initiating investments as per your life goals. You can take help of a financial advisor to guide you with your plans and to understand the best investment opportunities. You must accumulate assets like real estate, Mutual Funds, equity, bonds, gold etc. whose value will appreciate with time. These investments must be picked as per your returns expectations and risk appetite. Borrow if you must to build some of these assets, but clear off your loans on time. With your assets, you can work your way towards a secure retirement.

Serenity — Your Legacy: Fulfilled Dreams, Secure Retirement, Debt-free Assets

The word serenity implies the state of being calm, peaceful, and untroubled. How does this work in financial planning? Well, if you have strived throughout your working life to ensure a smooth retirement, then you have won yourself a peaceful life. And if you have achieved this along with successfully repaying all your loans – Home Loan, Auto Loan etc. – you must have earned a clean credit history. Imagine if you have to struggle to arrange for funds to repay your debts in your golden years or pass on a debt like home loan to your children. Would you be at peace with yourself? No. So work on repaying all your debts to celebrate the well-deserved serenity. At the same time, invest in instruments that can give you regular flow of income during retirement years and ensure your health is insured in your golden years.

The writer is CEO, is a leading online marketplace in India that helps consumers compare and apply for credit cardpersonal loanhome loancar loan, and insurance.