Are You Financially Fit?

  For any middle class family in India, money means the simple cycle of earning, paying bills, make a living and spending. But this cycle is given many twist and turns. People are earning, but not always by the right means. People are spending too, but not always on the right things. And in between of it all we blame “money” to be the culprit of every sin. Well, let’s ask ourselves then.  Do we use money or does money drive us? Every household also runs on a budget. Sometimes we step over it, sometimes we are miles away from it. A budget however is the only parameter that gives us   a real picture of our finance. Is finance the amount of money saved in bank? The answer is partly yes and partly no. The reason why it is no, is because while the amount saved makes us feel secured about the future, it also makes us feel insecure because it’s there and still not being used. This is almost like a catch 22 situation. This indecisiveness often leads to worries and stress too. Interestingly just like there is a concept of IQ, where a human’s awareness about various aspects is measured. There is an EQ (Emotional Quotient), where a human’s emotional quotient is measured. How aware is he/she about his/her own emotions. On the same lines, FQ (Financial quotient) too should be a barometer. Financial quotient could be the awareness of how well does one manage his/her own finance. […]

Personal Finance Planning

Image Credit: Pixabay American author Hervey Allen once said “The only time you really live fully is from thirty to sixty. The youth – are slaves to dreams, the old – servants of regrets. Only the middle aged have all their five senses in the keeping of their wit” Well, we need all the wits we can to get through the phase. Unlike the 20’s, a responsibility doesn’t seem real until we hit the 30’s.  Marriage, kid /s, Home loan, Car loan and many other things suddenly feel like a big mountain that we have to cross and cannot have an escape route. Break up of goals: Short-Mid-Long – Financial planning is always goal oriented. This might sound a bit obvious that one must have short (less than five years), middle (7-10 years) and long term goals (20 years plus). But, it’s the most important step. For instance, as a short-term goal, you may need to plan for the kid’s primary school fees, which could be even as high as Rs 80,000 a year, Or more. Mid-terms goals could be a car (may be a second one), a family vacation abroad, kids’ higher education; long-term goals could mean buying a bigger house, and retirement needs. As a rule, 10 % of the post-tax income of those starting their career at around age 25 can be the starting point. Over time, as the income increases, up to 15 % can give you a good head start and a buffer. As you […]

How involved are you in your financial planning?

Financial Planning, Image of a clock and plants growing over coins

Image credit: Pixabay Have you read Sheryl Sandberg’s ‘Lean In’? In her book, the COO of Facebook, Sheryl, mentions that the division of chores at her household was traditional. Her (late) husband Dave Goldberg would handle the bills and the finances and Sheryl would take care of the kids’ activities, food and, the birthday parties etc. Dave was at that time the CEO of Survey Monkey and Sheryl is still the COO of Facebook. I for one was relieved to note that it was a traditional model they followed – he handled the bills and finance while she handled the other stuff. Because it reflected mine. And maybe, yours too? Unfortunately, in 2015, Dave suffered a fatal cardiac arrhythmia while he was running on a treadmill. For anyone, the sudden demise of a spouse is indeed an irreparable loss. Yet, anybody’s guess is that an educated and accomplished COO like Sheryl would have been able to ‘more than competently’ handle all decisions including financial ones, despite the sudden upheaval in her life. I wonder if I would be able to. How about you? Would you be able to handle the financial decisions that impact your life and those of your dependant’s ‘if’ life puts you in a spot where you need to? If you are reading this, you probably are well educated yourself, and maybe have had or still have a good job. Despite your education and career, do you make decisions on ‘where’ to invest and ‘how much’ to […]