Developing good financial habits early can improve your life
I tell all my clients that they should start saving for the future as soon as they can – and that it’s never too early to start.
Some protest and say they’re still young and that they can’t think about saving for the future yet. I take these opportunities to explain that, while everyone’s circumstances are different, saving from a young age will make a huge difference.
A steady savings and investment strategy will help us all achieve our life goals earlier – and more easily – whether that’s buying a house, paying for a child’s education, starting a business, or saving for retirement.
Long-term view
When we save, the power of compound interest over the longer term – where you earn interest on the interest itself – can help deliver higher returns.
Saving even a small amount each month will help grow wealth over time. Consistency is important.
It takes a bit of planning, but this should be simple and achievable for many of us.
Financial literacy
So, what’s stopping people?
Time can be a factor, but increasingly it’s a lack of financial literacy that holds many people back. Often, people are not aware of what’s out there – and they don’t ask.
We should all take steps to find out more about managing our finances and the best ways to strike a balance between what we might want to spend money on now, while saving for a more comfortable future.
This includes making sure we have adequate health insurance, to take care of anything that crops up as we age. With people living longer and with healthcare inflation rising by 8% globally, each year, it’s arguably more important than ever to plan for the future.
Financial planning
At HSBC, we have a wide range of products to help meet our clients’ financial needs, which we discuss with them regularly to check that they’re meeting their expectations and life goals.
Above all, I’d say the earlier you can start saving, the better. This helps to take the pressure off as we get older.
Good financial planning from an early age will lead to better decisions and it benefits us all on a human level, as it gives us a sense of empowerment, satisfaction – and a feeling of financial freedom.
What kind of planner are you?
Take our quiz – designed to help you prepare for life’s key moments – to find out whether you’re a basic, proactive or power planner.