Bad Spending Habits

I often come across friends who tell me that they have negative balance in their savings account by the 25th of each month. They often burrow money from others and repay it next month when the salary gets credited.

That’s when I came across making a financial plan of one such friend. I was surprised to know that my friend actually overspent of what he used to earn each month. My dear friend, had a few of the pampered habits listed below with examples.

Technology or the peer effect: All of us have a like a particular asset. Some like cars and bikes, others like new generation touch screen mobiles, laptops, I-pods and the list goes on. If we look at someone with a new phone that is better than ours we too have a desire to own it one day. But little do we realise that technology is not here to stay. It is a fact that pagers in United States ruled for ten long years but in India pager companies go wiped out in less then a year. Then came normal mobile phones, then came mobile phones with games, music, touch screen and what not. Here, I mean to say that technology is moving really fast to keep pace with. Most of us don’t like to use the same phone for years. Innovation makes us look at new things and all of these demands a price. So keep a track of your spending towards technology and you need not have a new mobile because your friend has one.

Show-off: A pop corn in a mall or a multiplex that costs forty to sixty rupees would hardly cost rupees ten if you prepare the same at home. But you are prepared to pay that premium just because you have gone on a date or with a group of friends. You tend to think, about your friend who would ill-comment about you, if you don’t purchase some snacks during intervals. Don’t you? Hence just to show-off you tend to over-spend.

Mall effect: Now-a-days we at least have one super mall next to our area of residence. We go there to purchase a few things as they turn out to be cheaper than the baniya store or because you get more variety. We end up over purchasing quite a few eatables that are not on our shopping list, but they were purchased as they had a good offer or were being sold for a good discounted price. Realise, that you would not have purchased the same products if you would have visited your baniya near your house as the same offer would not be available.

Hasty decisions: You see an advertisement while window shopping that you would get a home theatre system free on purchase of an LCD. This ad would obviously make you step inside the store and you give a chance to the salesman to convince you to buy the LCD on cash or credit. He would even give you a refund of your old television with remote and offer you no interest if you make full payment within six months. Its unjust to let go of such a good offer. Think, if you would have missed that shop you wouldn’t have actually bought that LCD. It would have been a different matter if you actually required one television for your home. Please read, understand and analyse a product before you buy. Remember haste makes waste.

The sale effect: Its been a 365 day sale at almost all the shops in Mumbai. Buy 3, get 2 free, 60% flat discount, or offer valid till stocks last are the most common adverts outside the shops. But every time I pass by that shop the stock doesn’t seem to get over. Sale does not always mean that you have got the best deal. It is better to analyse the actual price of the product according to its quality and other factors and then decide for yourself, is it logical to pay an X amount for 1 + 1 free offer. To learn more about the product, scan the internet, check out other such schemes, check out competitors price and then make a wise purchase decision within a few days.

Overburden with EMI: Equated monthly installment is a commitment by you towards a bank or a financial institution promising them to pay an X amount each month under any circumstance. EMI can be for a home, car, personal loan etc. Please remember to have an EMI of not more than 50% of your income. Your personal expenses are minimal when you are single but the expenses and responsibilities increase with an increase in every additional member in the family, maybe a wife or a child. It is always logical to keep your EMI’s in control so that even in case of redundancy you can afford to pay the EMI for a few months from your emergency expenses or savings till the time you are re-employed. Also protect your family with an appropriate insurance equal to the total amount of all your outstanding liabilities.

Over leveraging: Many of us tend to follow a herd tendency towards investing. If Mr. X has earned a quick buck by investing more than what he could we even try to win our luck in lotteries, stock markets, chit funds, real estates etc. Remember, Mr. X was luckily in the right place, at the right time and in the right investment to earn more out of his leveraged investment but the situation would have changed when you try to invest the same way Mr. X did. So be cautious. Think ten times before making an investment option.

At the end of the day its your hard earned money. Spend it as you like but with caution.

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The Power of Systematic Investment Plan

A goal can be any target that needs to be achieved in a stipulated period. There are different types of financial goals like, buying a flat, children’s education, marriage or retirement living expenses. All of these are critical long term goals in your life. These goals need to be achieved in a disciplined and systematic manner. 

When I say systematic, I mean investing a fixed sum of money each week, month or year to achieve the targeted financial goal. In this article let me make you understand the different advantages of SIP investing. SIP as everyone knows is Systematic Investment Plan. Generally SIP relates to investing a fixed sum of money each month in mutual fund scheme. The rupee cost averaging and the power of compounding are two main advantages of SIP investments.

Rupee Cost averaging: If you wanted to buy units of a mutual fund you end up purchasing more units when the net asset values of the units are down, and vice versa. Here, it is the average purchase price that matters and not the purchase price of one unit as you will keep on purchasing each month on a particular date. The returns are based on this average cost. This way you average the cost of your purchase and sell the units in future to achieve your financial goal. This helps in negating the volatility in the markets.

Power of compounding: It refers to returns earned on the principal as well as the interest amount unlike simple interest where you earn returns only on the principal amount. It also rewards investing at regular intervals and works best over long tenures. The larger the tenure of investment, more are the returns. Also, the earlier you start to invest, the more you benefit. For instance, if you begin investing at age 30 and invest Rs.10,000 a year for the next 10 years at 9 per cent per annum, and roll over the proceeds until you’re 60, you’ll end up accumulating Rs 9.28 lakh (your total investment only Rs 1 lakh). On the other hand, if you begin saving at age 40 and invest Rs 10,000 a year for 20 years at 9 per cent a year, you will end up accumulating Rs. 5.58 lakh (your total investment of Rs 2 lakh). This means that by keeping your money invested longer, you can get the benefit of compounding and can become richer by Rs 3.70 lakh (if you start investing from age 30), although your principal investment was just half of what you would invest by starting at age 40. Take a lesson from the above example and start saving as soon as possible.

Remember, you will have to fulfill many goals in future for which you will have to start investing systematically from now.


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The Joy of Giving

“It’s not how much money you make but what you become from it is important”.

Have you ever wondered why people like Warren Buffet and Bill gates have decided to give away a big part of their wealth to charity or why so many NGOs are doing their work smoothly and why still new NGOs are opening everywhere? The only reason behind this is people feel happy when they give or when they donate. 

Almost everybody must have felt this joy of giving in their life. Sometimes it makes you feel like top of the world when the people to whom you have donate gives blessings to you. After all what we are going to take with us when we will leave this world is not wealth, it is those blessings which we earned by doing good work.

“ There is enough for everybody’s need, but not enough for anybody’s greed”  – Mahatma Gandhi.

Many times I discussed the topic of giving or charity and most of the time I get answers such as we don’t have time or we don’t have money. The real truth is that they don’t have heart to understand the importance of it. We feel that if we do charity then we might be short of money. Actually this kind of thinking comes from very narrow mind. If we cannot give that mean we are already short of it. Giving away makes you feel that you have more. Many people argue that why should we help someone, they should manage on their own. I feel that we should look at this as an opportunity given by god to do some spiritual work. Entire life we struggle to make this life good but charity help us in making our current as well as next life good. You might say that who knows about next life. You are right, therefore do some good work and relax that those good works will help you in your next life. I guarantee you that giving away small part of your income will give you more happiness then buying some unwanted stuffs. Those blessing will give you more peace because it comes from true heart. Their prayer directly reaches to god.

“If you can’t feed a hundred people, then feed just one.” Mother Teresa

Donating money does not always means that you have to give big amount. We should be donating according to our capacity. There is no minimum or maximum limits to it, but make sure that you are happy for whatever you are giving. It should not feel like a sacrifice. Many NGOs help thousands of children but when they contact you they ask to sponsor only one or two children. You can decide that you want to donate some part of your monthly income. Just the way you do your financial planning to achieve your personal goals, you can do charity planning for your spiritual goals.

“Let us not be satisfied with just giving money. Money is not enough, money can be got, but they need your hearts to love them. So, spread your love everywhere you go.” Mother Teresa

When I am talking about giving I am not only looking at money. Many people misunderstand that giving is always related to the money, but that’s not complete true. Mother Teresa is the best example of that. She didn’t give lots of money but she gave lots of love which is more valuable than money. When I visit old age home they don’t bless me for how much I have donated but they just bless me for going there and sharing some love with them. They are in their last stage of life and all they want is some care and love. Same as orphanage home, children like things you give them but they also want love from you. I believe that we have true knowledge only when we are kids or when we are old. In the childhood we don’t care much of money but when we grow up we start giving more importance to it and again when we become old, we realize the truth that money can’t buy love. If you can’t give money then just give your love. The more love you give, the more love you get.

We don’t need to get link with many NGOs but one or two should be enough. Give your money and love to those needy people and god will bless you.

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All about Deep Breathing

“Take a deep breath” you must have heard these words many a times but hardly anybody knows how it helps us. Breathing is very important part of our life. If we don’t eat we might survive for one week or if we don’t drink then we might survive for 3 or 4 days but if we don’t breathe then we can’t survive for more than 2 minutes. So let’s understand how deep breathing works and what are its benefits.

Old people say that everybody comes with pre decided breaths on earth. God have already decided how many breaths we will take on the earth so old people advice us to use your breath carefully. We might argue that we don’t control our breath, it happens automatically. That’s perfectly right, we don’t control our breath but what we do is we disturb our breathing pattern. God has given very good respiratory system but we harm it with our thinking and lifestyle.

Do you know that a dog breathes 29 to 30 times per minute? And on an average a dog has a life span of 25 t0 30 years. Human takes 14 to 16 breathes in one minute and have an average life span of 70 to 80 years.  A turtle takes only one breath per minute and have an average life span of 200 years. What this analysis says is that more deep breath we take more we live.

Anthony Robbins has explained that deep, cleansing breaths give your lymph system a helping hand in clearing out the toxins from your body. The lymph system works by acting in harmony with the blood, surrounding every cell in the body and protecting each one by removing dead cells and any other toxins and excreting them from the body. The toxins are then removed from the body through our waste products, mucus, or our skin. Deep breathing is so important because, unlike our blood flow, the lymph system does not have a ‘pump’ to push the lymph fluids around our bodies. Rather, the lymph system requires the muscular movement which is created by breathing.

Some other benefits of deep breathing:

  • Deep breathing controls high blood pressure.
  • Deep breathing helps in reducing stress. Whenever you are stressed or angry, just lie down and take few deep breaths. Your all stress and anger will go away.
  • Deep breathing also releases endorphins which help in reliving headache, sleeplessness and other pains.
  • Deep breathing is also used in Meditation which helps to focus mind. For me Deep breathing is a type of meditation.
  • If you regularly practice deep breathing then the capacity of lungs increases and you get more oxygen for your body.
  • Deep breathing also helps in proper functioning of your respiratory system.

Please note that as a beginner we should only try simple Breathing exercise. You just need to follow the formula of 1-4-2.

  • Breath in for 1 count
  • Hold for 4 counts
  • Breath out for 2 counts

For example – if you were to breathe in for two seconds, then you would hold your breath for eight seconds and then breathe out for four.

Try to follow above 20 times at a stretch. If you will follow the same three times a day then you will feel increase in your energy and immune power.

We all should be doing Deep breathing exercise everyday. It doesn’t consume much of your time, you can do it anytime and it’s totally free.

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How to get up early in the Morning

I always get different answers when I ask people “How many hours of sleep do they really need?”  Different people need different hours of sleep. It actually depends mainly on their body structure, their health and their work but on an average we need 7 to 8 hours of sleep.

I normally go to sleep around 10:30 pm and wake up at 5:30 in the morning. Many people get surprise when they hear that I wake up so early in the morning. I reply that they can also get up early. I have just followed simple steps which I have mentioned below. What you really need is discipline and commitment.

Decide your time to wake up before you go to sleep.

Have you ever noticed that many times when you have some urgent work next day morning you get up before your alarm wakes you up. This happens because you have thought of urgency before you go to sleep. Unconsciously you tell your mind to wake you up early.

Our subconscious mind is more powerful just before we go to sleep. You need to tell your mind just before going to sleep at what time you want to get up next day. When we are in sleep we think about getting up early and as a result our mind ring its alarm and you get up early. Our mind is the most powerful alarm in the world. Try this today, tell a specific time you want to get up in the morning and tell it to your mind just before you go to sleep. Do let me know your result.

Do not press snooze in your alarm.

I have had a bad habit of pressing snooze in my alarm for more than 5 times which resulted in laziness. Whenever I had to get up early I used to keep alarm of 30 minutes before time. You might have notice that you feel more sleep after get up and sleep again. You will feel lazier.

Just wake up from bed as soon as your alarm rings. You will feel more active and your laziness will go away. Don’t give your mind a chance to think of sleep instead of that give a thought of excitement for new day. This will help to keep you energetic entire day. As I told you subconscious mind is more powerful before going to sleep and also just after you wake up.

Experience the freshness of morning.

Open the window and take deep breath in the morning. You will feel like you are a free bird flying in the sky. Believe me you won’t get this feeling in any other part of the day. The air is most fresh in the morning. When you take deep breathe you actually intake more of pure oxygen.

Morning gives you new hope, it gives you new excitement and it gives you fresh solutions to your problems because your mind is calm. You might have spent hours on problem at night which you could resolve in minutes in the morning because you are fresh in the morning. Once you get habit of feeling fresh you will never sleep till late, not even on weekends.

Do Workout or Yoga in the morning.

According to me the real meaning of the morning is to get ready for your entire day. You can charge your body through workout or Yoga, whichever inspire you. When you do workout or yoga, your blood circulation improves and all parts of your body get good amount of oxygen.

If you want to lose weight then morning is the best time to do exercise. Make it a habit to exercise daily and you will see the great result. You can either go to gym or you can do it at your home but make sure you don’t lose your interest. You can try different kind of exercises. You can also try Yoga. It gives you peace of mind and healthy body. You can also go to walk. Try to walk either in garden or where you can see greenery. Spend some time with Mother Nature. It will rejuvenate you.

Once you are used to the benefits of above you will never want the laziness again. If you wake up continuously for 21 days then it will become your habit and you won’t even need an alarm. Me and my parent wakes up every day at 6:00 am without any alarm. We have conditioned our mind in such a way that we get up early in the morning. You can use your spare time to get in to any activities you like. Your productivity also increases. Just follow the simple steps mentioned above and you will become an “Early Riser“.

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