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Getting Your Personal Finances in Order

Getting Your Personal Finances in Order

There are people who struggle through their entire lives – just paying bills, loan EMIs and continuously doing things (or job) they don’t like. Lets aim not to be like those people.
There are people who have no idea how they manage to live paycheck to paycheck. Somehow, they are still able to save some money here and there. But that’s mostly because of luck and not their skills. Lets aim not to allow luck to play such a big role in our lives.
Then there are people who live under this constant fear of not having enough money for their short- and long-term goals. This is inspite having decently stable and regular incomes. Obviously, these people are doing something wrong. Lets aim not to be in the same category as these people.
Lets rather aim to become a person – who broadly knows how money works and he uses that knowledge to make it work for himself. This will make him prepared, confident and happy with his financial situation.
But the journey to become such a person will not be easy.
It will be tough at first.
Tiring in the middle.
But eventually, it will be worth the effort.
Now its my personal feeling that aperson who doesn’t appreciate the importance of personal finance, is unlikely to save or invest a lot of money. He will instead end up spending whatever he can. This might seem like the right thing to do now. But remember, that as you edge towards retirement and your regular income is about to be extinguished, you will have nothing left. Your kids might not be of much help too.
On the opposite end can be a person, who is quite frugal (doesn’t spend a lot) – but still does not understand the real meaning of personal finance. While he might have money stashed up in bank, his money might not be getting utilized to its fullest extent.
So understanding personal finance is absolutely necessary. And luckily for us, its not rocket science. But most people still get it wrong.
Get your + family’s life and health insured, save some money for emergencies, invest for long-term goals, spend wisely and more importantly, less than what you earn.
Its pretty simple.
As far as my own personal finances are concerned, I have a system that works for me. Its not perfect. But given my current circumstances and priorities, it works for me.
But the same system might not work for others.
This is the key point to understand here.
Here, there is no one size fits all.
You need to think for your own self.
Don’t worry if your financial life is still not where you wanted it to be.
But also, don’t keep waiting for the perfect personal financial strategy to find you. It really takes time to see what works and what doesn’t with money. Empower yourself with knowledge – read books, Stable Investor ;-), reliable online resources and take action.
Don’t just copy others or keep waiting as both can be financially harmful.
And be ready to ask yourself some tough questions…
If your aim is early retirement, then ask yourself – Am I doing something to retire early? 

Am I saving (or investing) more than regular people (who are scheduled to retire at 60)?
If you want to save money for travelling around the world, are you actually doing something for that? Remember, that just waiting (and ofcourse saving money) to travel when you grow old, doesn’t work. You travel a lot betterwhen you are young to middle-aged. Old age makes travel a not-such-an-exciting option for most people.
I specifically took up the points of early retirement and travelling because these are close to my heart. 🙂 Now talking of things close to my heart, let me confess something:

I don’t save and invest as much as I possibly can.
Yes. You read it right.
Why?
Because, I don’t want to keep saving without spending.
Sounds odd?
Read further…
I spend a lot of money on travelling. Continuously earning, hoarding and not spending is something that I don’t aim to achieve in life. Ofcourse, getting rich is fine with me. But being the richest man in graveyard is not my thing.

Richest Person Graveyard
Don’t get me wrong here.
I am not saying that I don’t save or invest.
I am also not saying that spend everything you earn.
All I am saying is that there should be a balance between the two.
You shouldn’t compromise the present by not spending at all. But you also shouldn’t compromise the future by not saving at all.
Warren Buffett once said:
Who is to say whether it is better to defer a dollar of expenditure on your family – on a trip to Disneyland or something that they’ll get enormous enjoyment out of – so that when you are 75, you can have a 30-feet boat instead of a 20-feet boat. There are advantages to spending money on your family when it is young – giving them various forms of enjoyment, education, or whatever it may be. But it’s crazy to be spending 105% of your income.
That’s so damn right! Isn’t it?
So unless you worship the act of hoarding money, having a balance between saving and spending is the key. I remember reading the below words somewhere:
Save enough money so that you’ll have enough for the future and for emergencies. But spend enough now to avoid looking back with regret.
A new financial year has started. And I think that it’s the right time for you to think about your personal finances.
Your personal finances might be in a mess. Accept the hard truth. And make a conscious decision to do something about it.
Its also possible that you might already be doing great. But there are always things you could have done better.
So take out some time to assess your networth, goal readiness, risk coverage, investment plans, etc. If someone is trying to stop you from doing it, do this to them. 😉
Strive to make your money decisions smarter, wiser and more efficient. Becoming wise is a slow game. But it is necessary if you have a long way to go. And I am sure you have.

Have a very happy financial year!! 🙂
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Written by Dev Ashish

Founder - Stable Investor Investing | Personal Finance | Financial Planning | Common Sense

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