Financial Planning – The Demon
In my first blog i.e. “Saving – A Herculean task”, I slightly touched upon some challenges in the Personal Finance Management space.
So here I am with some first hand experiences and learning against one of the biggest and most ignored challenges i.e.
“Financial Planning – The Demon”
Absence of Financial planning can eat up all your earnings easily and take you towards bankruptcy i.e. why I call it a Demon hidden in your wants & expenses. This is something which requires knowledge, discussions and mentoring as early as your childhood.
I used to spend as soon as I receive any money from anywhere including my parents or any guests (Those days it was more of a culture to give money to children – a token of well being and strong relation). So I carried the same spending behavior to my adulthood when I got into salaried category which played a key role in disturbing my financial health in future.
If you are not planning your expenses both recurring or one time and just splurging money, it’ll soon start resulting in unwanted surprises during the month and mostly by the end of the month. Especially when you have a credit card bill (or any other bill for that matter) due date in the last week of the month.
Take Away –
- Best way to learn is to talk to as many people as you can, especially with your friends and family. And for those who love to live in their own shell, there is a plethora of information available on the internet, so research and read as much as you could.
- Plan your expenses well before you start your month (High Level planning for the year would be even better to cover annual expenses).
- Try to keep all your due dates in the first week of the month. In fact enable auto pay (or standing instruction or ECS) to avoid any late fee penalty because it slipped your mind and get a dent on your CIBIL score.
TIP – Get a 2nd Savings Bank Account and use it just to accumulate savings. Don’t use it for your regular expenses except in case of emergency. Transfer all the idle money to this account – which you can not allocate with any expenses.
Please do share your learning and other ways to do and improvise the financial planning.