I am over 28 years old and till today, I had never actually sat down and done any financial planning, be it short or long term. Heck the max financial planning I have done till now is figuring out, how to put together enough funds/limit on my credit card to allow me to purchase something I wanted!
Outstanding balance on my credit card and no savings to speak off!
So finally, after reading a lot of financial articles and deciding earlier last month to start saving a little, I today sat down and did some planning. Nothing long term, just a year end goal which I want to start working on, to ensure that I can finally start earning some interest, instead of paying it to my credit card company!
Of course this does means that at least for the foreseeable future, I won’t be able to buy any new lenses, filters or gadgets etc. but if I manage to attain the goals I have set for myself, I wouldn’t really have to depend and wait for the payment from the advertisers coming each month, in order to meet my monthly expenditure.
I know this is something I should have done a long time ago and my family, who have been extremely supportive of me, had been advising me to do the same and I never actually paid much attention to it. But I seriously hope that it isn’t too late for me to start financial planning, saving and investing.
The first stepping stone to this is to get rid of my debts completely, lets see how much time it takes for me to be able to do that and whether or not I am able to curtail my desires long enough for it to not rise up again!
I have been following your blog for a long time now. We are also forum mates on BCMTouring though I am now pretty much dormant. I usually do not leave many comments but today I felt like doing so! We have it seems quite a few common interests. Roaming around and dabbling in photography come to mind. These are not cheap hobbies. I remember when I thought, buying a good camera would be a nirvana and today a Pandora’s box of “needs” has opened ranging from lens to tripods to filters to camera bags to what not. then the problem is that you have to move out to click! And that is never cheap too. More good news coming with another fuel hike this week by the way1
Our interests apart my spending pattern was much the same. Fortunately my wife too shares these interests and any hope that my Mom may have had that “Bahu aake ise sudhar degi” has long been layed to rest! We too were living off credit cards and had no savings. Then one day something called the “great economic meltdown” struck and my wife lost her rather lucrative job. All of a sudden we saw the folly of what we had been doing or rather what we had NOT been doing.
To cut the long story short, I have discovered that expensive hobbies and savings can still exist! I did not want to travel less or compromise on f values! I would not want you to compromise either! Just do the following simple things. (remember saving and investment do not have any thumb rules and there is no ideal plan).
1. Decide upon a minimum (let us say 5k to start with) COMPULSORY saving pr moth.
2. Start SIPs (Systematic Investment Plans) in good mutual funds.
3. Get good health insurance for your family. believe me with so much riding and driving we better be insured!
SIPs don’t hurt, happen automatically and once you get into the grove, you can increase the quantum slowly. Btut never, ever compromise on your interests!
Thanks YS for this wake call…
Ashish, thanks for the tips. Bought health insurance last year, as I too felt that is quite important, especially for guys like us. Family already has cover from government.
Opened a SIP account with SBI Mutual Fund last month, right now its a small amount, but hopefully it will grow with time.
Also opened a PPF account with SBI today, took me couple of hours in the morning, but it is setup now and I will be scheduling automatic debit from my bank account to ensure that it is paid for at the beginning of the month and would be a kind of forced saving for the next 15 years and with power of compounding, regular saving and lump sump amount once in a year, it will be a good long term safe saving strategy. Not to mention a great way to save tax.
But like I said in the post, right now my main aim is to pay off my credit card debt, because no saving instrument would actually give me 38% annual interest, which is right now I am paying to my credit card company.
So at least for a while, everything else will have to take a backseat. But considering that I already have my DSLR + 18-55IS lens + 55-250IS Lens + 50mm f1.8 lens along with a nice CPL, bags, tripod etc. I guess this part of my life can do without any new inclusion/upgradation at least in the short term.
Thanks Rahi, glad I could help.