In present times the media we consume would have us believe that one has to only live in the present – future be damned. So we have our friends and acquaintances appearing to live the high life on their social media posts, we have brands telling us to buy their products, we have service providers telling us to buy their service, we have organizations luring us with cashbacks and discount offers. All this increasingly is supported by the lure of deferred payments – credit at the click of a button, “zero” cost EMIs and the works.
It takes a strong individual to turn a blind eye to this constant barrage from all media sources and most importantly to prevent becoming depressed at the loser-ness of their own existence.
Trust me the only thing this would result in is the people selling you this dream getting richer and you becoming poorer. Your financial future depends on you understanding the difference between needs and wants.
I don’t mean that one should live a saintly life with no appreciation for the finer things in life; but mark my words this cannot be at the expense of taking on unnecessary debt, compromised rainy day funds and missed investment opportunities. Earlier I had posted a blog “Early Bird Gets the worm” refer to it to understand the impact – you can read it here.
I would just suggest a restrained merriment. So basically the strategy is simple –
- Figure out your monthly expenses
- Strive to set aside over time at least 6 months worth of expenses as a rainy day fund
- These you must not dip into ever! You can lock this into a fixed deposit and should only use the funds if you find yourself in between jobs. Trust me this would help you not only to tide over tough times but also ensure that you don’t have to take BS at your current workplace if it comes to that.
- Make sure you use “invest” not just for tax saving but also for growth – so invest in ELSS funds that have traditionally provided a much better return against government debt instruments
- Set some money available invest towards retirement planning
- Finally prepare a plan for your “wants” for the short, medium and long term and save towards these.
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