The Hidden Cost of Late Starts: Why Financial Planning Can’t Be Deferred

Every moment is a gentle reminder that time never stands still. Instead of allowing uncertainty to cloud our decisions, we need to make a shift towards clarity and control that can help us create a future that feels secure and empowering instead of fearful.

Rather than viewing financial planning as a distant responsibility that one maybe only take up in their 40s, one should see it as the essential groundwork one needs to build early on to thrive amid job transitions, rising expenses, and life’s unexpected turns. Delaying or procrastinating financial decisions doesn’t just delay progress; it narrows the choices you’ll have tomorrow. And that's why it's important to start early.

The Hidden Cost of Postponing Money Decisions

For most people, the traditional belief still persists. Many still assume the right path is to first get a job, get married, buy a house, and think about retirement planning only at a later stage. However, many don’t realise that each year of delay can cost thousands in potential growth, reduce financial resilience, and compromise retirement security.

Having a simple plan that includes an organised budget, an emergency fund, protection, and long-term investing can prevent today’s money leaks from becoming tomorrow’s financial holes.

The Impact is Not Merely a Number

“Individuals who decide to only look at retirement planning in their mid-40s, where they have growing expenses and low savings, often experience guilt, anxiety, and decision paralysis. This emotional strain can push many into picking unsuitable or risky products or relying on family support later in life,” says Sabyasachi Sarkar, MD & CEO of Go Digit Life Insurance.

Time: The Advantage No Product Can Replace

The earlier you invest, the more years your money gets to compound, multiplying growth exponentially. When returns earned on investments start earning returns themselves, growth shifts from linear to exponential. Even modest amounts matter if given enough time.

For instance, if Investor A begins investing Rs 10,000 monthly at age 20 and Investor B does the same at age 30, both continuing until age 50, the results are striking. At a 10 per cent annual return, Investor A ends up with about Rs 2.26 crore, while Investor B accumulates only Rs 75.94 lakh - a difference of Rs 1.5 crore. At 12 per cent returns, the gap widens further: Rs 3.49 crore versus Rs 98.93 lakh, a difference of Rs 2.5 crore.

The outcome depends on the return, risk, and product chosen. Late starters can still catch up, but that may require contributing more, taking higher risks, and adjusting one’s financial goals.

Survival Trio: Longevity, Inflation & Protection Gaps

Three essential factors demand immediate attention for early financial planning:

Longevity: People now live longer than before. However, their savings do not match this extended lifespan. Your savings have the risk of running out before your demise if you delay financial planning activities.

Inflation: Your investments need to increase at a rate that exceeds inflation because healthcare expenses, together with living costs, will continue to rise. “With inflation averaging around 6 per cent, Rs 50,000 today could cost over Rs 1.6 lakh in 20 years. That's why it's important that your investments grow faster to ensure they keep up with rising healthcare and living expenses,” says Sarkar.

Protection Gap: The current insurance coverage levels fall short of what most families require for protection. Early financial planning enables you to create both short-term protection and enduring financial stability.

360-Degree Planning: Beyond Just Saving

Financial planning today is not just about saving more. Key elements include:

Protection: Term insurance, health insurance, and critical illness cover ensure that medical events or death do not wreck family finances.

Liquidity: An emergency fund covering a few months’ expenses helps handle job loss, repairs, or medical needs without expensive loans.

Growth: Long-term investments in diversified instruments (such as savings plans, market-linked products, or retirement plans) aligned with risk appetite and goals.

When combined, these elements help manage three scenarios: living a full life, dying early, or dealing with illness or disability while reducing family stress.

Financial Wake-Up Call

Younger earners, especially Gen Z professionals, are already showing a shift by focusing on savings, budgeting, and basic protection early in their careers. “This behaviour reflects the reality that financial independence no longer comes automatically. For those in their 30s and 40s who have not started, this is a wake-up call. Waiting longer only widens the gap and reduces the time to fix the situation. Starting today is far better than delaying for years,” advises Sarkar.

Turning Awareness into Action

Financial planning works when it moves from intention to action. “The first step is to list obligations, dependents, and key goals such as children’s education, marriage, buying a home, or retirement age. Then match these against current savings and protection. Any visible gaps in insurance, emergency funds, or retirement savings show where action is needed first,” says Sarkar.

From there, build an automated system using fixed investments, insurance cover, and periodic reviews with a qualified advisor. This simple system can transform money from a source of worry into a source of support. Starting now means the future self does not have to rely on last-minute fixes, family help, or painful lifestyle cuts.