Aurangabad-based financial planner Anirudha Hatwalne laments that youngsters do not plan their finances. And, their only worry is about saving taxes at the end of the year.

As a result, they end up putting money in instruments not in sync with their future needs. "They save only to spend on clothes, accessories and the latest gizmos," Hatwalne says.

Take the case of public relations professional, Vandana Pathak. Of the Rs 22,500 she takes home, her mandatory expenses come to Rs 15,000-16,000.

"Phone bills of up to Rs 4,000, conveyance, shopping and sudden expenses come close to Rs 10,000," says the 27-year old.

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Ask her about saving and she says, "I do not have any investment. I want to invest in bank fixed deposit, but only after a pay raise."

The Rs 6,000-7,000 Pathak is left with every month simply lies idle in her savings account, earning a meagre 3.5 per cent.

She wants to study further, but hasn't planned, yet. The only consolation: Her savings have accumulated over the years and she is sitting on a small corpus about three months' salary, which can serve as an emergency corpus.

To be able to save for the future, Pathak should invest at least Rs 5,000 every month, preferably around Rs 3,000 in equity-diversified funds, says Hatwalne.

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Mutual funds will give a good upside to her portfolio and are a liquid option. Fixed deposits could be looked at, if Pathak is left with some more money, as the rates are attractive. She is also advised to buy a term plan of at least Rs 30 lakh.

On the other hand, advertising professional Joybrato Dutta wants to start his own film production house in another five years. He would require a minimum of Rs 5-8 lakh for it. How does he invest?

"I invest Rs 37,000 a year in two investment-linked insurance plans," he says.

His mandatory expenses amount to Rs 15,000 a month - Rs 5,000 is set aside as saving for his dream venture. His other monthly expenses are Rs 10,000 on partying. He sends around Rs 50,000 yearly to his parents.

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Clearly, his savings are not enough for a goal that is five years away.

At the same time, five years is a good enough time to accumulate a corpus of Rs 5 lakh.

"And, insurance is not an investment because these are long-term products and not in-line with his goal. But since he has already invested, he may continue with it," says certified financial planner, Pankaj Mathpal.

Dutta is advised to increase his investments by Rs 6,000-7,000 a month in equity-diversified funds by way of systematic investment plans (SIPs).

If he can spare another Rs 2,000, I would advise him to invest in the Public Provident Fund (PPF).

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It would help him in the long run, may be for his retirement corpus, since he plans to set up a business and won't have the Employee Provident Fund to support him, according to Mathpal.

A health insurance or personal accident cover is a must for Dutta, for at least Rs 1 lakh.

Similarly, 23-year-old Omkar Hardikar, who started working three months before and invests Rs 12,000 every month, but in debt instruments such as PPF and bank fixed deposits.

Fortunately, he knows it is not sufficient for a goal that is only two years away.

Unfortunately, he plans to make up for it by investing in stocks directly, something that doesn't make financial planners too happy.

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"From a tax-planning perspective, I advise equity-linked saving schemes and infrastructure bonds for saving extra tax," says Anil Rego of Right Horizons.

Since Hardikar's goal is two years away, Rego advises investing in equity-diversified funds via SIP and shifting the money to balanced funds closer to the goal.

Hardikar is also suggested to restrict his PPF contribution to 20 per cent of the portfolio, as it is not a liquid option.