Financial planning: Things to remember before you turn 40

For example, what happens is somebody has a goal and decides he needs about Rs 20 lakh for his child's education based on today's cost levels, but not taking into account inflation..

The basics for financial life is going to be: right amount of emergency cash and right amount of life and health insurance because your family size might have increased, your circumstances might be different..

The third thing that you need to also check is interlinked to the amount of savings that you are doing, to check where are you on loans, especially unsecured loans, because unsecure loans affect your credit score..

For example, the household savings data came out recently which showed that equity allocation that households have is still less than 10% which means that on a majority of investments that they are doing, if we exclude real estate, are not beating inflation..

One of the very important things to do early on is to ensure that wherever you are investing, the portfolio as a whole needs to be able to beat inflation and you need to have a good amount of allocation..

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