Christmas and New Year celebrations always remind us how wonderful it is to be young, wild and free. With not a care in the world, we tend to be over-optimistic when it comes to our personal finances.
But as a personal finance coach as well as somebody who does live a carefree life, I want to share something with you. I want to tell you that neglecting good money management habits is just a dementor in disguise, ready to suck the life out of us when we least expect it. Yes, that was a Harry Potter reference. 🙂
I want to tell you why managing your own finances is essential and how it can lead to a magical life.
1. It’s personal
Personal Finance, as the name suggests, is extremely personal. Your life, your financial goals are all subjective to who you are as a person. So it only makes sense for you to sit down and chalk these out with yourself. Nobody else can do it for you. And until you start doing this, your financial journey will be quite aimless.
Let me give you an example. I started my career at HDFC Bank. I was earning well. I later took a year off to travel and volunteer. Traveling and giving back to society means a lot to me. I could do so only because I had enough savings to go on for a year and more without a job. So plan out how you’d want to utilize the money you earn, and do so wisely. If fitness matters to you, spend a chunk of your earnings on that, instead of spending on mindless shopping. If seeing the world excites you, invest towards that goal, rather than taking an expensive cab everywhere you go. Believe you me, these baby steps go a long way in building a beautiful life.
2. For independence
Once you learn and imbibe the best money management habits in your daily life, you’ll be amazed at how liberated you feel. Liberated from the endless cycle of waiting for payday and feeling like you’re never earning enough. This freedom will enable you to better focus on the work you do, while the money you invest grows and works for you.
3. To be updated, not outdated
How many of us use a feature phone these days, as opposed to a smartphone? Hardly any if at all none. So why do we go by decades-old financial advice of money back life insurance policies, fixed deposits and recurring deposits? Are we sure that this is the best advice in the current financial scenario?
Wouldn’t it be better if we had access to some reliable sources that tell us the why’s, what’s and how’s of our financial journey? One such website is Value Research Online. A research organization that’s nearly two decades old, they dispel invaluable advice for newbies as well as experienced folk. It’s one of the best resources out there. And then there’s us of course. 🙂
4. For retirement
The words “pension” and “retirement” are words that we do not associate with at all. Retirement is something that we feel may or may not happen to us. It’s an event so much in the future that it’s easier to just ignore it until it’s upon us. And when it’s upon us, it way too late to plan for it. I want to tell you, that retirement is one of the main financial goals to plan for.
There are two ways to look at it. At the age of say, 60, we could either choose to live off our children’s or somebody else’s income or choose to leave them an inheritance while living off our own investment income. Which one appeals to you more? If it’s the latter, then we’ve got to start planning our finances now.
5. To build openness
Getting yourself financially sorted at an early age has a huge positive ripple effect as you grow older. Not only have you built-in discipline when it comes to your spending and investing habits, but you’ve also armed yourself with wholesome knowledge on money matters. This translates to people around you. Your friends, family, and most importantly your spouse if and when you choose to get married.
There are numerous instances that we know of personally, where the couple has had a rocky marriage due to “financial infidelity”. That’s scary.
A few years ago, I probably wouldn’t believe this myself, but today, I see how my business partner, Komal and her husband have conversations about money. Komal says that they’re open and honest about their finances and this brings in a lot of comfort and security. They’re tuned in to each other’s money mindsets and are open to adapting and learning together. They’re confident of making the most informed and well-meaning decisions when it comes to their finances as a couple. If this isn’t a huge plus, I don’t know what is!
With 2019 coming to a close, let’s make a pledge together.
Let’s promise to be more financially aware in the new year.
And let’s put in some effort to become financially independent.
Happy New Year from Team Rupiko!
