Do you know how much are you spending?

Do you now how much are you spending? Do you have a broad sense of where your money comes from and where it goes? And how much?

If yes, great.

If not, some things may need to change.

Do you know how much are you spending?

Meet Mr. and Mrs. A. Young, working professionals in early 30s in one of the metropolitan cities in India. Not super rich, but still making more than what most of the people in the country aspire for.  They live a good life.

They work hard – putting like 50-60 hours a week in their corporate job. And once off work, they party hard to unwind. Usually on Fridays and Saturdays. Occasionally they travel to good places. They love to shop. Typically once or twice a month. In fact, last month they got a new wardrobe to store their new collection of clothes.

They love their new SUV. While the EMI on car loan they have to pay on it is slightly more than what they budgeted for, it’s still OK. They wanted to have this car since quite some time. Though the Bangalore traffic annoys them and they are usually happy with their cabs.. They live in a rented apartment, and buy to buy a house soon – as soon as they are able to save for the down payment.

2 months back had a good week-long fun-and-shopping filled vacation in Singapore. After coming back, they had to make sudden travel plans to Mumbai – to attend a cousin’s wedding. To add to that some last minute wedding related  shopping too, which before they realized, went over budget. While the TV and iPad they bought after the Singapore trip could be converted to easy EMIs, they couldn’t do that for recent shopping. They had apparently maxed out their credit credit cards – partially thanks to Singapore! They  both owned one credit card each and hoped that at least they had one more card. So they had to take a small amount of personal loan.

They rarely analysed their credit card bills, but this month they did. Apparently, they had only been paying minimum amount due since last few months. And paying for random subscription which they hardly use! And the interest had piled up.

They needed to soon create a plan to get rid of the credit card debt. And to cancel the random subscriptions they have taken which they are getting billed every month, but which they don’t use! And maybe, a partial freeze on eating out barring few occasions.

Hopefully, they’ll pay off personal loan and car loan in the course of time. And maybe start saving money too. Hopefully, they’ll create an emergency fund, and investing towards their financial goals. Before that, they’ll hopefully identify their financial goals.


How common is the above story or its variants? This may be a one off case, may be not too common. Maybe, not very uncommon too, in parts.

Any long term financial planning approach needs to have saving and investing as its raw materials. And to begin with, you need to understand where your money comes from and how much, and how much are you spending?

You may keep a track of your spending and invest it towards your financial goals. Or like Mr. and Mrs. A, you can choose to live like there is no tomorrow. The choice is yours!




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