I’ve fond memories of a well
spent childhood in our ancestral home built by my grandpa seventy years back.
Among the many traditions followed, one I distinctly remember is the annual practice
of getting a little bit of pocket money from elders during major church
festivals. It was called ‘Perunnal Podi’. While my parents and relatives were
generous with the amount, the experience was quite different when it came to
getting the amount from my grandpa.
I learned a lot on negotiation
skills and bargaining to say the least during these times. Most often it ended
up with a win-win situation since I was the only one in the family who was
successful in getting whatever amounts I managed from my grandpa. Though the
effort didn’t justify the result, getting two Rupees from him was hailed as one
of the greatest achievements in my life. Do note that this was a considerable
amount for a school going kid especially when you know the fact that these were
the times when a mint flavoured candy costed just five Paisa!
Born in 1913, less than a year
before World War One started and having lived a blessed life of more than a
century, my grandpa has literally seen it all! He had been through both the
World Wars and more importantly the great depression of 1930s. Add to this, his
father’s untimely death while my grandpa was just a fifteen year old teenager
left him in charge of a large family with two recently married sisters and two younger
brothers. They had a thriving business with a favourable-on-books financial
status where people owed them double the amount of money than the debts they
had. But the economic depression broke everyone’s back and many of them
couldn’t pay back the amounts owed which forced by grandpa to sell some of his
properties and settle his own debts.
This entire experience taught
him the value of every single Rupee and that was quite evident in all of his
transactions. He literally had an iron grip on his expenses to put it in the
nicest possible manner. He used to remind us to be diligent in our expenses each
time we ask for money or plan to spend them. This was supplemented with his
lifestyle where he hardly created any arena for spending money unnecessarily.
He took bare minimum risks when it came to investments and had a strong preference
to lead a debt-free life which obviously made him quite comfortable when he hit
the bed every night.
Planning the threshold or
limits of your expenses is quite a personal decision for each one of us. We
could either choose to spend a lot and still be within our budget or could
spend a little and save the rest for future investments. Nevertheless there are
certain factors to be considered while taking decisions on investments
especially the ones that require you to spend from your future income. When you
plan the payment for an investment as EMIs you need to ensure that you clearly
have an understanding of your income so that the EMIs along with your other
expenses don’t leave you high and dry.
If we take a quick stock of the
categories of our expenses for a month, some of us could be in for a shock. We
might be spending a lot more than we should on certain types of expenses. Be it
our shopping or eating out expenses or any other category, we ourselves are the
best judges to answer this simple question, ‘Should we be spending so much on
this category’?
When you effectively
supplement the answer to this question with a planned amount to be spend for
that category every month, you’ve already taken your first steps for better
planning of your hard earned money. What could be a pleasant surprise is the
fact that introducing these checks alone will be enough for you to meet all of
your planned expenses and even leave you with an amount as savings.
Once you have optimized your
spending limits by applying this check for all your categories of expenses all
you need to ensure is that this pattern is followed in your life. Then comes
the next logical step. What can be done to increase your income? While for some
people both these acts can go in parallel, for others it might be worthwhile to
put the checks on the expense first before exploring the options to increase
the income. We’ll possibly talk about this some other time.
May you be empowered with the
first step to get the threshold of your expenses right and lead a more fruitful
and fulfilling life!
God bless.
