Little innocent beings undergo rigorous training for nursery interviews to bag admission in sought-after schools. And ‘competition’ in life starts. Hereon, it is a constant struggle to keep proving oneself to do well in life, as reiterated by teachers, dramatized by parents and emphasized by every self-proclaimed well-wisher. This ‘do well’ means ‘earn well’ in the modern-day lexicon.
Sub-consciously this ‘run else you will be left behind’ switch that gets activated in our childhood keeps us running through life. We never learn to pause and analyse what we are running after. Money, which is a means to live life, becomes a life goal. And we constantly keep striving for ‘more money.’ There is nothing bad about being ambitious but this vague quest for ‘more’ can often lead one astray or cause money disorders. Money disorders arise when people don’t control their habits concerning money – like compulsive money making, reckless spending, obsessive hoarding, etc.
For a good and fulfilling life, developing a prudent relationship with money is imperative. It is essential to identify our financial goals, needs and wants and then create a financial plan to achieve these. Without proper planning, one can get looped into a haphazard earning and spending lifestyle, eventually falling short of funds when the need arises.
The following pointers can help you get started with financial planning:
- The first step is to identify financial goals of life and list them in decreasing order of priority, i.e., based on how important achieving a particular goal is for you. For example, retirement planning is a top priority goal for most. Some other key goals include funding children’s education and marriage, buying a home, etc.
- The second step is segregating the goals into two buckets - ‘needs’ and ‘wants.’ Needs are elements that are essential for life, like retirement planning. Wants are desires of life that one wishes for but are not critical to existence, like taking a world tour.
- Next, classify the goals into short-term, mid-term and long-term goals. Short-term refers to goals that need to be achieved within a year, mid-term goals are 3 to 5 years away, and long-term goals are a minimum of 10 years away.
- Now that goals are listed and sorted get an understanding of your family income, expenses and savings. Savings and investments are crucial to achieving goals. It is advisable to consult a professional financial planner to help you in this regard.
- Finally, it is essential to keep re-visiting your financial plan at regular intervals to update it as per changing circumstances in life and make necessary revisions to stay on track regarding your planning.
Having a financial plan helps keep us in charge of money matters and thereby helps ease the anxiety around earning ‘more money.’ Chasing ‘more money’ often traps one in a downward spiral. As you make more money, you start spending more of it. And as you get habituated to spending more money, you start needing more of it.
Have dreams and goals that help lead a happy and content life and view money as the means to achieving these and not as life’s goal itself.
