Life’s Milestones: Tailored Savings & Financial Planning at Every Stage in India

Table of Content

1. Marriage & Shared Financial Goals

2. Preparing for Parenthood: From Birth to College

3. Buying a Home: Renting vs Owning

4. Career Breaks, Job Switches & Sabbaticals

5. Retirement Planning in Your 30s & 40s

6. Dealing with Life Shocks & Emergencies

7. Estate Planning & Wealth Transfer

8. Your Personal Financial Roadmap

9. Summary

Financial advisors recommend early investment because starting early sets the foundation for a prosperous and secure future. The earlier you start, the more time your investment gets to grow through the magic of compounding. Not only that, but it also influences you to take more risks since you have sufficient time to wait out the period of market volatility.

1. Creating Your First Budget

If you are wondering where to start or how to develop financial awareness, follow the 50:30:20 rule (50% of your salary for your necessary spending, 30% on your interests and 20% on investment or savings). When you have dedicated funds and a specific financial goal, you have fewer chances of overspending.

2. Building an Emergency Fund

Life is uncertain. Certain things are beyond our control, such as health issues, business loss, or job layoffs. In such circumstances, having an emergency fund could save the day. Financial advisors recommend building an emergency fund containing the next 3 to 6 months' expenses in liquid form.

The best way to do that is via high-yielding savings accounts or FDs. Since investment options like ULIPs, Mutual Funds, stocks etc comes with it’s share of risk where as FD’s provide a stable returns with minimal risk.

3. Starting with SIPs, FDs & Tax-Saving Tools

Investing in SIPs, FDs, PPF, and ELSS not only allows you to grow your wealth over time, but these financial instruments also offer tax-saving benefits^#. For example, if you invest in PPF with ₹5000 per month over ten years, with compounding, not only will the amount grow, but you will also be able to claim tax deductions up to ₹1.5 Lakh under Section 80C of the Income Tax Act, 1961.

For example, 24-year-old Aishani starts with monthly SIPs of ₹6,000 from her ₹30,000 salary. If she continues this disciplined savings habit for at least 5 years, she will have contributed ₹3.6 lakh. With average market returns of 8–10%, her corpus could grow to around ₹4.2–4.5 lakh, giving her a strong base for future investments.

Marriage & Shared Financial Goals

Marriage is a significant milestone that marks the beginning of a new phase of life. So, to make this occasion special, financial planning after marriage and sharing a common goal with your partner is a great idea.

Here is how a savings plan for marriage works:

1. Financial Conversations Before and After Marriage

Having financial conversations before and after marriage helps in building a common financial goal. It also eliminates conflicts in the future.

To start, have a budget to track, monitor your expenses, and open a joint account. This will help in understanding each other’s financial styles and building a substantial marriage corpus.

2. Setting Up Joint Accounts, Budgets and Goals

Setting up a joint account is the best way to monitor overall spending for couples. It is crucial to have an understanding of the exact amount required to maintain their normal lifestyles, such as covering expenses for travel, EMIs, and rents.

Then, they can think of building up an emergency fund and long-term investment options to secure their financial future and plan ahead to achieve financial goals.

3. Reviewing Insurance and Updating Nominees

For those who have existing insurance plans before marriage, it is necessary to review the coverage and update the nominee information after marriage. This enables policyholders to protect their partners and dependents financially at all times.

Preparing for Parenthood: From Birth to College

Moving further ahead in life, when you are planning to make a family, your financial responsibilities grow even further. The ideal time to start preparing for your children's future is when you are planning for a baby.

Starting early enough gives enough time and luxury for your finances to grow. You can use tools like child education calulator or compound interest calculator to see Power of compounding in play and understand how starting early can help you get most out of your investments.

To cover the expenses of health, education, and financial planning for children, customisable savings and financial plans are essential.

Here is how you can excel at it:

1. Estimating the Cost of Raising a Child

Long-term investment options, such as life insurance, children's insurance plans, and ULIPs, require time. So, it is ideal to estimate the cost of raising a child, taking into consideration their education, health, future goals and inflation. Based on these considerations, you can start strategizing your investment. It is also essential to ensure that your investment plans are customisable; that way, you can modify your contributions as necessary.

2. Choosing the Right Child Education Investment Plans

Since the education costs are rising globally at a rapid rate, 10% to 20% per year, having a financial cushion that could cover education costs is significant. If you are wondering how to save for a child's education, you are not alone. However, there are many ways to be efficient in deciding on the right plan.  

For example, if you are a central government employee, you are eligible for the Children's Education Allowance. You can apply for it to cover your child’s tuition and hostel fees. If you have a girl child, investing in the government-backed Sukanya Samriddhi Yojana is effective and so on.   

3. Increasing Life & Health Insurance Coverage

Suppose you have been investing in a term insurance plan since you were 23 years old. Now that you have a family, you would want to extend the coverage. Explore term insurance covers worth ₹1 crore or ₹2 crore depending on your lifestyle and add riders such as Waiver of Premium or Accidental Death Benefit so that your children remain protected even during unfortunate circumstances.

Buying a Home: Renting vs Owning

Buying a home is one of the biggest commitments of life, yet it is mostly misunderstood since it claims a chunk of your lifetime savings. As a consequence, to search for cheaper options, you end up renting. However, by separating facts from fiction, you can proceed with your dream house purchase.

Here is how:

1. Weighing Rent vs Buy Decisions

Think of your long-term financial goals and consult with an expert advisor. You can discuss, based on your income source, the region you want to purchase the property in and career stage, which one is more suitable.

Here is a breakdown of renting vs buying a house. Suppose you spend ₹10,000 on rent, which might seem economical at the beginning, but if you take a home loan, with a little more spending on your EMIs, you can own a property of your own.

1. Plus, if you have robust financial investments and a savings plan, you can claim tax deductions under

2. Under Section 80 EE of the Income Tax Act, 1961 up to Rs. 50,000 subject to conditions prescribed or

3. Under Section 80EEA of the Income Tax Act, 1961 up to Rs 1.5 Lakh subject to conditions prescribed and

4. Section 24(b) of the Income Tax Act, 1961 up to Rs. 2 lakhs on home loan interest as per Income Tax Act, 1961 if opted for Old Tax Regime.

2. Saving for a Down Payment

If you are unsure about how to save for down payment, you should know that typically, the down payments are only 10% to 20% of your total property cost. So, if you start investing early, in your 20s, in market-linked funds such as ULIPs or SIPs, your investments could grow through compounding by the time you consider buying a property, say in 10 years. You can utilise that amount to cover the costs of the down payments easily.

3. Understanding Home Loans and Tax Benefits

Understanding home loans and tax benefits^# beforehand will enable you to get an idea about your eligibility, tax benefits and Home Rent Allowances (HRA). To take a home loan and improve loan eligibility, you need to maintain a good credit score, consider loan tenure and keep your credit utilisation ratio lower.

Furthermore, depending on the loan amount, individual tax slab and payable interest (average 8.5%), you can claim tax benefits^#.

Home loans impact long-term financial planning gravely, but if you know how tax claiming works under Section 24 of the Income Tax Act, 1961 you will save up to ₹2 Lakh and under Section 80EEA, first-time home buyers can save an additional ₹1.5 Lakh.

Career Breaks, Job Switches & Sabbaticals

Life is full of uncertainties; events like these can hamper your income and savings. However, with steady investment plans, maintaining insurance covers and having an emergency fund for job loss could be beneficial.

You can take charge of such uncertainties in the following ways:

1. Financial Planning for Planned or Unplanned Breaks

Having a strategic financial plan, an emergency fund and being adaptable is the ideal way to handle all kinds of life uncertainties. To be effortless at it, you can start having a side hustle and earn extra to save for the future. Moreover, you can have a 6 to 12-month financial buffer or a safety net.

2. Using Emergency Funds and Liquid Assets

When job gaps or shifts occur, liquid assets work as saviours. Investing in liquid mutual funds, short-term RDs, and sweep-in FDs is a great way to be prepared. Depending on your current income, you can set aside a percentage for these short-term liquid assets.

This will help you stay consistent on your long-term investments, prevent chances of borrowing and enable you to stay financially independent even when you do not have a regular income.

3. Maintaining Insurance and Investments During Gaps

Many people skip this part, thinking that since they do not have a regular income, maintaining insurance and investments is an extra burden. But the truth is, skipping insurance premiums and SIPs payments could lead to penalties. Not only that, but breaking the consistency could interrupt the compounding.  

The best way to ensure you are consistent with your long-term investments is through activating auto-debit. If such situations occur where you are unable to pay premiums, cover the expenses using the emergency fund and secure your assets for the long run.

Retirement Planning in Your 30s & 40s

For many, retirement planning in 30s seems too early. One of the biggest myths going around is that you should make a retirement plan only when you are nearing retirement. Beginning early means saving smaller amounts consistently while enjoying the power of compounding. Though market-linked options carry risks, a well-diversified portfolio helps balance them, ensuring financial security for the future.

You can follow these steps:

1. Estimating Your Retirement Corpus

When you have a quantified goal, your actions will follow that lead. Try using a retirement calculator to determine the ideal age for you to retire. For example, you have an annual income of ₹12 Lakh, in order to replace 70% of your income during your retirement at 60, and with 80 years of life expectancy, you will need a retirement corpus of approximately 3 Crores. The amount has factored in the impact of inflation of 4%,  ₹50,000 as monthly expenses and  ₹25,000 as your current savings.

2. Choosing Between NPS, PPF, and Mutual Funds

Knowing the growth potential, interest and tax benefits of each type of investment instrument and comparing them will help you to determine which option serves you the most.

• NPS (National Pension Scheme) is a government-backed retirement scheme suitable for Indians as well as NRIs. You can develop a strict savings habit and enjoy tax benefits. With an interest rate of 9% to 12%, this market-linked instrument has higher return potential.   

• PPF (Public Provident Fund), on the other hand, promotes savings as well as investments. With an interest rate of less than 7.1%, PPF requires minimal investment and guaranteed income.

• Mutual Funds allow you to invest a fixed amount periodically. Depending on market performance, the amount gets compounded over time, offering higher returns and flexibility to withdraw.

So, as you can see, each financial tool serves a specific purpose. Compare your preferences and choose the most relevant one suitable for your life scenario.

3. Securing Post-Retirement Income with Annuities

Retirement only means a halt in your regular income, not in your expenses. So, to secure your financial independence even when you do not have a regular income, investing in annuities is a good call.  

You can choose between immediate and deferred annuities, start investing, and ensure a steady income for life. The flexibility of annuity payout allows you to maintain your lifestyle even post-retirement.

Dealing with Life Shocks & Emergencies

Unexpected events can derail your years of savings; therefore, developing an emergency fund and owning a life cover is important. These will help you bounce back financially, irrespective of the circumstances.  

To build strength to handle life shocks and emergencies, do these:

1. Building & Using Sinking and Emergency Funds

Since different emergencies require different financial approaches, it is wise to diversify. For example, you can build short-term funds for immediate emergencies with saving 3 to 6 months of current expenses. This fund can cover medical emergencies, sudden home repairs and job loss.  

Sinking funds, on the other hand, refer to the dedicated pool of money set aside to accumulate over time to fulfil future obligations such as bond repayment, purchasing a car, covering expenses for your children’s studies abroad and so on. The best way to create such funds is through mutual fund investments.

2. Must-Have Insurance Covers for Protection

If you take preventive measures, you will not have to face financial blows from sudden, shocking events. Life insurance with critical illness coverage, health insurance with disability and accidental coverage are some of the best instruments.  

Investing in relevant insurance covers will help you create a strong personal finance plan, which will protect not only you but your whole family in case things go south.

3. Resetting Your Financial Plan After a Crisis

After a financial blow, recovery takes time. Following these steps could help you to stand back up.

Step 1: Reassessing financial goals and cutting out unnecessary expenses.  

Step 2: Rebuilding emergency fund by investing in non-liquid assets, such as, renting out a property that is not in use.

Step 3: Adjusting investment horizons by diversifying your portfolios in various equity funds that are more adaptable to the new reality.

Estate Planning & Wealth Transfer

Estate or wealth transfer planning helps create a structured plan so you are well-versed with the power of your assets. When it comes to distributing, you know which assets to distribute to whom and when. Lack of such planning could lead to family disputes and unnecessary delay.

Here is how you need to go about it:

1. Why Everyone Needs a Will

Wills are documents that carry information about how one wants to distribute their existing assets in the future in their absence. For example, parents can make wills to transfer their assets to their children. To do the transfer, you need an executor who will take the initiative to do the needful.

If you miss out on making a will during your lifetime, all your assets will be distributed as per the succession law. That way, you will not be able to choose the successor, and your assets might go to someone you do not want.

2. Understanding Nominee vs Legal Heir

Nominees are eligible successors, whereas legal heirs inherit the assets of a deceased person. Identifying this critical difference will ensure that your assets are protected as per your wishes. It is significant since this provides you with the control to transfer your life-long assets to someone you trust as worthy.

3. Tax-Efficient Wealth Transfer Options

The most effective ways to transfer your assets are through wills, nominations, gifts and trusts. You can take assistance from a qualified advisor to ensure that your plan is legally sound, tax-efficient and perfectly aligned with your long-term goals.  

The lack of proper planning could lead to a higher tax burden for heirs. As per Section 56 of the Income Tax Act, 1961 not all gifts are tax-free. If a gift is worth more than ₹50,000 and if the gift giver is not a relative, then the entire amount of such gift is taxable in the hands of the receiver. So, keeping in mind such details could save you from a lot of trouble in the future and protect your assets across generations to come.  

Your Personal Financial Roadmap

With unified financial planning for life milestones, you can create a tailored strategy that secures your present and future. It is never too early or too late to start.

For guidance, connect with HDFC Life’s trusted financial advisors to understand where, how long, and how much to invest, protect your wealth from uncertainties, and design a SMART plan aligned with your goals. Begin shaping your personal financial journey today.

Here is how you can proceed with your personal financial roadmap:

1. Mapping Life Goals into Financial Milestones

Map your life goals based on your specific objectives, and create a financial milestone which could be your guiding light. Depending on which stage of life you are currently in, and what comes next, you can develop your goals. But no matter what, always prioritise savings. Whether you are planning on having a fancy wedding or your children’s future education or early retirement; strategic savings could always be helpful.

2. Reviewing and Adjusting Plans Over Time

Reviewing your financial planning from time to time provides you with an idea of what can change and what can remain. That way, you minimise the chances of mistakes when your financial goals evolve with time. However, it is also essential to ensure that your plans are achievable and relevant at all times. If at any point you believe that your goal are changing, make sure that you pivot and align your investment based on changing goals. This is one of the reason why you should go for investment plans that are adaptable.    

3. When to Seek Financial Advice

It is best to seek financial advice whenever you start building your financial strategy, as that could eliminate the possibility of costly mistakes. For example, you can talk to a finance expert while you are considering buying a house on EMI, or transferring your assets to a nominee or planning on creating a trust or a will. Timely consultation will be better for your financial health. Make sure to check the advisor’s credentials before you take any advice from them.

Summary

When you start earning, it is wise to have an understanding of the basics of financial literacy and proper financial planning for life milestones. Even a small amount of your salary could make a huge difference in the long run. Most importantly, talk to an expert whenever you feel overwhelmed with your financial responsibilities, as they can guide you in the proper direction.