Give in to little joys, but don’t stray from your long-term goals
We live in times when phrases such as YOLO (‘you only live once’) or FOMO (fear of missing out) are used commonly. These are acronyms that reflect not just a changing demographic, but also a changing outlook. It indicates how we, as a society, view life and therefore, how we spend it. It’s common to see hoardings encouraging our spending habits and talking about how discounts and paybacks can be enhanced by spending more. It’s also routine to find billboards promoting ‘easy cash’, ‘jhatpat money’, ‘loan within few minutes’ and ‘zero interest EMIS (equated monthly instalment)’.
The moot point is where do we draw the line on our spends, for we also have a tomorrow to live for. Buying a house, taking a sabbatical, starting an enterprise, paying for your kids’ school fees, funding their higher education costs, and retirement – when our cash flow dries up, we will have to break the corpus we have built over the years.
The guiding light for such an overpowering dilemma, which is churned out of collective wisdom, says balance is the key and moderation is the way forward.
Here, it is pertinent to quote Dave Ramsey, who says: “You must gain control over your money or the lack of it will forever control you”.
Practically speaking, all this amounts to doing your mathematics right – listing your goals and estimating how much they will cost you (adjusting it for inflation), prioritising them and eventually budgeting your expenses.
After this exercise is done, you will know the amount to be spent on a monthly basis. It would be best to seek
IT WOULD BE FITTING TO RECALL A SIMPLE TRUTH BY CALVIN COOLIDGE: “THERE’S NO DIGNITY QUITE SO IMPRESSIVE AND NO INDEPENDENCE QUITE AS IMPORTANT AS LIVING WITHIN YOUR MEANS”
professional help at this stage rather than doing it yourself.
Lifestyle habits, once formed, are not easy to reverse or modify. Once we know how much money to invest and how much to spend, we will better be able to control our urge to spend on frivolous things.
And with time and practice, we will be hardwired to react with equanimity.
However, there are ways in which you can enjoy life without going overboard: watch movies at off-peak hours, eat at home before going out, shop during sales or from wholesale outlets, and utilise happy hours for drinks and meals.
Visualising your future goals will help you say no to impulse buys. When tempted to swipe your credit card for non-essential items, ask yourself this question: “Am I busting my monthly budget? Are my impending goals not critical anymore?”
It would be fitting to recall a simple truth by Calvin Coolidge: “There’s no dignity quite so impressive and no independence quite as important as living within your means”.
The traditional wisdom on walking the tight-rope of spending and saving/ investing is captured pithily in the Swedish proverb that goes, “He who buys what he does not need, steals from himself”.
Deepali Sen is a certified financial planner, founder partner of Srujan Financial Advisers
LLP and author of ‘Why Greed Is Great’