Home / Money / Personal Finance /  If you start saving early on, you will be able to tide over crises

After their marriage in 2016, Anirban Mohapatra, 32, and Ananya Dash, 28, suddenly found themselves with no savings. Mohapatra, a corporate lawyer, had used up all his existing savings for his wedding expenses and to set up a house in Bengaluru. Dash, a tax accountant, had just started her job and hadn’t been able to save substantially until then.

The first thing that the couple decided was to put an emergency fund in place. Mohapatra was a fairly disciplined saver from early on in his career. “I started working when I was just 22, and I saw two kinds of people in the corporate world. There were disciplined investors who focused on building assets, and then there were people who like to splurge on the next big watch in the market. I chose my side fairly early and wanted to play it safe," said Mohapatra. One of the things that helped him make this decision was the fact that he had to fend for himself as soon as he got into a job. “It was my father’s way of disciplining me. I was totally independent from early on without any financial support from the family," he said.

To put aside some money, the couple shifted focus from living in the present in terms of how they spent their money. They wanted to structure their finances—from wanting to build an emergency fund and a health fund to buying their dream home. The goal of buying a house is what took them to a financial planner. In 2017, they approached Shweta Jain, chief executive officer and founder, Investography, a mutual fund distribution firm. “When we were offered to buy the house we were renting, a quick review of our finances revealed that we were either not saving enough or not saving in the right manner and did not have clear future goals to work towards," said Mohapatra.

Jain helped them realize that merely depositing money in the savings account was not enough and their savings portfolio needed to beat inflation to generate enough money that could help them meet their goals. Mohapatra used to invest a little amount in mutual funds even earlier but on an ad-hoc basis.

The saving potential for the couple was high because they were a DINK (double income no kids) couple and intended to remain so. “It was a learning experience to not splurge and work within a budget but the discipline taught us that we could manage a similar lifestyle without major and unnecessary spending, which were mostly impulsive," said Mohapatra.

Jain believes that DINK couples should ensure that they save enough for their goals. “While they don’t have children’s goals to worry about, the seriousness of retirement goals or financial independence for that matter cannot be undermined. It becomes all too easy to live only in the present and not think about saving and investing enough," cautions Jain.

Like most DINK couples, their primary goal is building a sizeable retirement corpus to maintain a certain lifestyle in their old age and having enough savings to tide over medical expenditures, if any. The couple already has health insurance and life insurance as a basic layer of protection.

“Anirban and Ananya are focusing on saving and investing better. Long-term visibility has given them a purpose to save. They also understand that while things keep changing, their plans will adapt to new realities and keep improvising," said Jain.

Apart from providing for their long-term goal of retirement, they are also saving up to buy their dream house. The couple invests in a combination of short-term debt funds, and equity funds focused on bluechip companies and mid-caps for both their goals.

“With real estate pricing moving the way they have, we might prepone some of the goals like buying a house and postpone or cut down travel goals," said Jain.

Shifting travel goals for later has become a lot easier with the covid-19 onslaught that the world is wrestling with. Thankfully, the pandemic didn’t lead to salary cuts for either Mohapatra or Dash, like it did for many others, but they were on solid ground in any case. “We didn’t face any difficulty but the importance of having a financial plan and allocating funds to goals got re-emphasized and we had the reassurance of having financial backing, which really helped us emotionally in these tough times," said Mohapatra.

While many families bumped up their emergency corpus from six months of expenses to a year of expenses after covid-19 set in, the couple did not have to make that change either because they already had a sizeable one. “Covid has brought about a reality that nothing is secure anymore and that we need to have our emergency fund and insurance sorted out as a priority and not as an afterthought," said Jain.

Having structured investments right from the beginning of your career can sort things out in the long term, believes Mohapatra. Indeed, you can easily tide over financial crises if you start investing early.

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