What to avoid in Personal Financial Management- Experiences and Lessons-I

The importance of Personal Financial Management in our lives

We all have certain aims in our live(s). Some have big aims, or even grand dreams of becoming a superstar, Business Magnate, a super sport star, even a Prime Minister of a country.
Some have not so big aims like becoming successful in a certain area of expertise, getting a house of choice in a relaxed environment etc.
We need to plan for what we need to get.
That planning involves what all we will do, what all paths we will follow, our Plans B, C etc.
Yes, we can do a lot to follow a lot of things – in our career and in our jobs, or professions.

Yet, there is a key element that we have to plan and take care of. This is our Personal Finance. We need to have money with us, and in reserve to take care of current and future monetary needs.
Whether we like it or not, money- big or small is needed for our day to day and big requirements in our lives.
So, to take care of all this, we need to plan and follow a Solid Financial Management plan.

Experiences and Lessons in Personal Financial Management

During my journey in life since I started earning, I have been through various ups and downs- personally as well as professionally. A key part has been dealing with Personal Finance Management.
I learnt some lessons and had certain experiences- both good and bad. So I thought why not share some experiences and lessons, in a broad manner:

1)Never over-expose oneself in a particular investment pool. I did a bit more in United Linked Insurance Plans(ULIPs)and at a time, certain things started becoming unmanageable. I have managed to reduce the exposure, but it does hits you, and it is not so easy. So do take care on this count.
2)Do regularly invest in Shares and Mutual Funds. I did and it does helps. Yet, I think I needed to invest more in them at certain stage(s) when I had more funds. So, it is a good lesson learnt- in fact before 30 years, I think 50 to 60% investible funds must be parked in Shares or mutual funds.
3)If you are an India, Public Provident Fund(PPF) is a good option.
It is tax exempt, and after certain stage, one can also partially withdraw amount from it.
Now, one can also deposit through Online channels.
4)If one is married, involve one’s spouse also in financial decisions. Sometimes, they can advise well. At other times, if you feel that expenses are becoming unmanageable, then also this is important, else it can cause undue stress.
5)One ought to build emergency expense reserve early once one starts earning. One has to be optimistic, but bad days can come any time, and better be prepared than be wanting.

I shall share more experiences and lessons in coming parts.

——- To be continued ——-