HOLI kab Hai, Hab hai Holi. Holi is baar 20 march ko hai.
Yes, Its time for HOLI again. The festival of Colors is celebrated in different ways in different parts of the country. Also, while it is a Fun festival, it does teaches us some important Financial Planning lessons which are again hidden in its name:
H- Happiness ‘
Like Holi is associated with happiness, fun and frolic, similarly, one should plan Financial life around Happiness.
How can Happiness achieved in Financial life.
-Plan for Financial Goals that will help in achieve aspirations
-Investment should be in sync with the goals that you plan.
-Put your money to work so that money can work you and give the same amount of happiness in zero salary days.
-Dont buy products just to oblige Bankers, friends or relatives which will bring pain in future
-“Simplicity is the key to Happiness” Buy simple Financial products and stay away from complicated ones.
O – Organised
KIds love to plan for Holi in advance and like to keep it organised. They fill up Balloons early in the morning and are ready with their water guns and bags.
It is said- “If you have a good Financial life, you have a good personal life.” Give time to organize your Financial life so that it can give you a good personal life.
How can one be organized in Financial life
-File all the important Financial documents at one place and in drive
-This file and drive should be shared with all the family members who matter and are associated with your Financial life
-Keep Health insurance cards, car insurance policies handy so that they can reached out easily in case of any emergency.
-Build emergency Liquid fund equivalent to 3 to 6 months of monthly income which can be used in case of real emergency.
L – Liability Free
Holi is a festival where everyone is care free and stress free and enjoying day to the fullest. Similarly, Being debt free is the best feeling one can experience in their financial life. Though life is full of ups and downs , we ought to take loans which are for different purposes.
I have been always saying- It is not how much you earn, it is how well you manage your Finances is what will make difference in your life.
Believe me, I get to meet lot of people who are earning salary in five digits and are still debt ridden and are living their lives from pay check to pay check. On the other end, I know couple of people who are managing their income of 30000 per month, living in metro cities, and have a great Financial life which is well aligned to their goals as well.
How can one manage Debt?
-Make household and lifestyle budget towards end of every month which is to be followed in the subsequent month
-Keep aside CASH , yes I mean cash only here in the first week and make separate packets for the expenses segregated while budgeting.
-This activity will help you make the least use of Credit card and feeling of using excess money will also go away.
-Get rid of excessive Plastic money . Only one or two credit cards solve the purpose. We do not require 8-10 as each one has unique benefits and rewards. Think twice before spending on Credit cards as most people who get trapped in debt are the ones who not paying their credit card bills and are moving on rotational credit with compounding interest as penalty levied.
-Also, Usage of debit cards should be reduced to minimal as in today’s world of impulse purchases and instant gratification, if we pay through cash , we might think twice whether we genuinely require what we are buying.
Lastly, Warren Buffet has a very famous quote- “ Don’t Buy what you done need, one day you will have to sell things that you need.”
I – Individualistic
Holi is played in our unique individual way. Some would like to play with Gulal, some with Kewra, some with raw eggs, greece and paints.
Similarly , When we talk about Finances, We have our own unique lifestyle, needs, requirements,aspirations, backgrounds and way of doing things.
So, as the name suggests – Personal Finance, it has to be personal your own. One size doesn’t fit all.
At times, we look at Financial life of our neighbours, friends, peers and relatives and intend to imitate them which leads to discontentment.
This HOLI, have a colourful and joyous time and mark a beginning to a great and Colorful Financial life.
About the author: Gurleen Kaur Tikku is a Financial Consultant and devotes her time to her company www.hareepatti.com. She has done her Bachelors in Finance and Investment Analysis(BFIA) from College of Business Studies(CBS, Delhi) and MBA from IMT, Ghaziabad.. She can be Contacted at gurleen@hareepatti.greatestdesignever.com