Driving into his upmarket Bangalore apartment in a posh four wheeler, Mr. Harshil Shah looks like a man settled in life, an ambitious man on the right track. A 28-year-old, with a cushy job with a reputable MNC, recently married to Ashita, his financial stability and position in society are enviable to any observer.He is a poster child for any Indian parent. On close introspection, Harshil reveals he was not always the same.
“A few years ago I would completely run out of cash by the 20th of a month, with barely enough cash to buy me rice and curd which I made do for food two times a day. Savings plan was the last of my priorities, heck it wasn’t even on the list!” We have all been there, young out of college, with a nice 30,000 pay-check, the gifts for family, the treats and parties for friends, it is an endless list. Financial education is not something taught in Indian schools and the naivety can be excused. But as a working professional a few months into the job, one must arrive at the realization that splurging your salary and living pay-check to pay-check is not sustainable.
A year into his work life, at the age of 24 his then girlfriend Ashita, on facing family pressure to get married, had to step in and advice Harshil on his irresponsible manner of budgeting – or the lack thereof. She approached him with mutual funds, endowment insurance plans, and a strong case to stop the incessant partying. Harshil’s father’s impending retirement was another catalyst. But his father’s ailment came as the final shock for him and he quickly reorganized his lifestyle. With some basic budgeting, he was able to figure out where he spent the most amount of money, and how much of a chunk was being spent on unwanted expenses. He reduced his weekday partying and allocated a fixed amount for entertainment and travel. The carefree attitude stopped only in fiscal discipline and he could still continue partying with his friends, but now he has a budget for it.
The mature Harshil looked at the different savings plans available to him and settled on a simple endowment policy. He now wanted to be financially stable before proposing to Ashita and an endowment insurance plan seemed like his best option. An endowment policy is a life insurance contract designed to pay a lump sum after a specific term (on its 'maturity') or on death. This seemed like the best savings plan available to suit his requirement. With proper management of finances, Harshil could manage his income in an efficient way.
As a married couple, a disciplined approach towards investments helped them streamline their money, thereby assuring a secured and protected future for the both of them. The story of his very first endowment policy was the opening of a floodgate for Harshil and there was no turning back to the chaos before. He jokingly gaffs at the idea of him teaching his kids about saving and he says he will ensure they get their own endowment plan at the right age!
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