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Financial Goals

LESSON  1:

Money  is the  first thing that comes  to our mind  if anybody asks  us  “what do you  need most ?”    Whether  you  are a businessman,  entrepreneur,  employee  or         self-employed,  your obvious choice  is money.   Admit it!  If you say  “ no, no, that’s not me” or  “my  priorities lie elsewhere”,  then,  these  lessons  are  not for you.

Why is it necessary to have financial  goals ?  It is necessary, so that, you can plan for your future  needs  -  such as  - daughter’s wedding,  son’s  higher  education,  dream travel,    down payment for  home loan, or a major repair to your house .  This list is by no  means  exhaustive.   Surely,  you’ll have your own  priorities.

The  very  first  step in this direction is to save a part of  your  earnings.   For instance, If you  are a salaried person, save  a  fixed  percentage of your salary  in a separate  savings  account.   Now  wait.  I can almost hear you saying “don’t I already know this”  or  “ I already have an SB account.”   True.   But please go back and check how much money  you have actually  saved  over the past  few years.  I mean,  take  out your       SB  passbook and ascertain.  Do not mentally recall and leave it there.  There is a reason for doing this  physical  exercise,  which  I’ll explain later.

Now, for the next step:    Determine how much you can save every month.  If you total up all your monthly expenses,  you may be left with nothing.  Instead, try saving 10% of your salary and use  the remaining for your monthly budget.   Yes,  this does call for a little self-discipline.  Be very resolute here.  Otherwise, your mind will think of all kinds of excuses  to  “convince”  you  why you want to do this exercise from   next month, next Ugadi,  next  Diwali  or your next birthday.   You know,  for certain,  that this kind of “next”  has come and gone in your life many times.  You may even have  lost  many opportunities earlier by telling yourself  “next.”  Unless you make some  personal  changes  here  to come out of your comfort  zone  (more explanation  in Lesson 3),  you may continue to see such “next time” repeating endlessly.

It may help you  immensely  if you observe that your savings is a part of  your wealth.  This is so  important that I’ll repeat it:   your savings is a part of your wealth.     That means,  if your savings goes  up,  your wealth also goes up. Whenever you are tempted to put off saving  your income,  recall this sentence.    It may help you to change this sentence  to  “my savings is a part of my wealth.”    In your mind’s eye,  look at your savings as such from the larger perspective of your wealth.  Then you’ll see why savings is essential.  
Just think of all the things that you can buy  for your  dear family from  out  of your savings !

As I already explained,  this is just the first step.  The next step is to convert your savings, periodically, into a fixed deposit.  If you do not know anything about Mutual Funds or the Stock market,  please  stay away from them.  Just because  your friend told you he’s “making” money  in the stock market,  don’t jump to invest and lose your hard earned money.   Generally, mutual funds  (MFs) also invest in the Stock market and if the stock market goes down, so will your NAV.  However, if you have the required knowledge to study and understand,  it is the stock market and  MFs  which can grow  your money  fast.  (more information about this in a subsequent Module.)

If  you  have  read  this far,  perhaps  you’re  ready  to believe that  savings will  really help you  financially.   Give it a try.   After all, you’ve nothing to lose, but everything    to gain.  If you do not like the idea of saving,  you  can always spend whatever you’ve saved.  But then,  your dreams  will continue to remain  what they are : only dreams.  

Before going to Lesson 2,  be ready with your savings account.   At  this  point,  do     not  worry  about the low rate of interest  Banks offer on savings account.  If possible,  choose  that Bank which allows you to open your  account with the least  amount         as  ‘minimum’  balance.  Keep in mind that, for this new account,  you won’t be needing a cheque book.  Without cheque book facility, there are banks which allow you to open with as little as Rs 500.

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