In our short life, we often commit actions without any concrete reason or purpose. Most of the times, emotions have a major role to play because when asked

“Why did you do it?” the person replies, “Just like that. I felt like doing it.”

Sounds familiar? I’m sure it must. The same attitude or rather approach is true when it comes to our financial transactions as well. You may be surprised at how easily emotions and ‘just like that’ attitude while purchasing drains a significant amount from your pockets.

Finding it hard to believe? Well, below mentioned is a situation, if you’ve experienced this at any point in your life, then you too are a member of the ‘JUST LIKE THAT CLUB”.

    • Situation: You go to a mall with nothing specific in mind to purchase (window shopping) and suddenly your eyes fall on something that looks appealing. You feel that the product is made for you or that it’s calling out to you to purchase it but you’re confused about the extent of its usefulness to you. However, the appearance of the product takes over its usage and without debating much on various factors such as product endurance, product usefulness, an alternative or much cheaper option to the product or even your own financial health, you decide to purchase it by cash or card or even by using the EMI option.
      This results in two things-you are now the owner of a product that looks good but you’re not sure about its value addition in your life- hence you are now less richer to that extent and you’re a dream come true for every salesperson as you get easily carried away with the looks of the products and end up purchasing those items which you don’t require. Hence, the outcome is increased expenditure (and debt in case purchase made via credit card/ EMI option), cluttering of space with addition of yet another product and the feeling of guilt sooner or later.
    • The above situation is very common amongst the millennial. They get easily swooned by the “latest or the in-trend product”. Owning it is “lit” (slang for exciting or cool) for them. What they fail to realise is that like any other decision, financial decisions taken when young or in the present, always have an impact later when old or in the future. “What you sow, so you reap” stands true while dealing with money as well. Yes, it’ll be great to have that latest phone or that hi-tech camera or that dress which you can’t get your eyes away from or even going for that trip and ticking off yet another name off your bucket list; but at what cost?All of these may not be essential items to own at the moment and thus can be procrastinated to a point when you are in a sound financial position. However, the present way of life led by instant gratification or the ‘now or never attitude’ while undergoing an expenditure, opens up the door to the world of debt for many.

Nikhil Singhi

  • Ever wondered why many people in their late 30’s and above emphasize on saving up instead of spending?
    It’s because they’ve fought or are still fighting against debt and through their experience have thus understood the importance of securing one’s future financially. They know how crucial it is to form the right financial habit, to take those little steps towards building a large reliable fund. They know what impact the 2008 crisis had on their lifestyle. Ask them and they’ll tell you that only those who had saved or invested were least impacted.
  • Many people have this notion that money is earned so that it can be spent. This is not always true.
Money should be earned with the intention of earning more and making money work back for you!

When this is your mind set towards earning money, you not only increase your wealth but you also successfully fulfil all your desires with ease and without much stress. The reason being, the former gets you into a habit of just focussing on present pleasure rather giving much thought about the future requirements; whereas; the later focuses on delayed gratification (Foregoing current expenditure giving pleasure to future in order to reap greater benefits and lasting happiness later). Delayed gratification may sound boring to most people, which is why majority of them fall into a debt trap and struggle to come out of it as their expenditure habit remain unchanged even when trying to get out of the debt.

So is it too late to pick up? ABSOLUTELY NOT!

The beauty of the financial world is that it always gives you another chance to increase your wealth without even being an expert in this field.

What to do? Begin your journey towards building wealth by following the seven basic steps:

Nikhil Singhi

  • Get your mind-set right-earn money to make more money, to make money work back for you.
  • Start building right financial habits;
  • Practice noting-down every expenditure that you incur, no matter how small or big the amount is;
  • Start spending responsibly-before incurring any expenditure always keep in mind that you are accountable for your future financial strength and stability;
  • Have a two day cool off period while purchasing anything expensive;
  • Practice minimalism and you’ll start spending deliberately. Minimalism will also help you achieve mental peace and stability along with reduced financial obligation;
  • Invest before spending. In the process you can take help of your financial advisor/tax consultant/lawyer etc.

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