May traditionally is a lazy month. Most of it is spent on appraisals,holidays and planning for the next financial year. The men are coming home early,though that can also be to watch IPL. Most of us wish that the month would never end,except for the fact that the yearly bonus will hit the salary account when the month ends.
Most of us,I guess will already be counting the chicks before they are all hatched. The long pending vacation,repaying those loans,payment of school fees may all be on the list. Generally people do also come back and recommit towards implementing their financial plans during this period. These bonuses are an annual affair,they dont happen all the time. In our total working life,if we are lucky,it is probably just 30 35 times that such opportunities present themselves. And so,it becomes all the more important that these are used wisely.
Once an elderly gentleman had stressed on the importance of using money wisely,he said,You young people tend to take these R 50R 100 lightly and are okay with wasting them. When you are old and retired,your doctor would have prescribed you a new medicine and you might be short of just this much money to buy it. At that time you would reflect on how these small sums just went up in air. And reflections they would remain – you wont be able to do a thing about it.
If we can look into the future and see how all the money that we earn today,can go a really long way in future,we would use our money much more sensibly today,wont we?
So what can you do with responsibility to make this bonus money go a really long way?
Forget the money for now and sit down with your spouse over a cup of coffee and a piece of paper and dream. Yes,I said dream. Dream about all that you want to do in your life buy that big house,send children to good colleges,retire early,go on that cruise,stay independent after retirement,whatever comes to your mind. Trust me,this would be one of the best couple things you would have done in a while.
Gulp down that cup of coffee and now put a figure to how much it will cost you to live those dreams. How much money would you require to buy that house,to live after 20 years,to pay your childrens post-graduate fees? This is your left hand side of the sheet. Take professional help here if you need some.
Place each of these goals one below the other,in order of priority. Which of these dreams are very close to your heart? Which of them would give you the most happiness when they are achieved? Which of these are nice to have,but are not show stoppers?
Now pick up that bank statement and see how much money has come in. This is the right hand side of your sheet. And now you should be able to see the picture,the bigger picture. You dont need anybody else to tell you what to do with your money.
If you know what to do with your life,you would know what to do with your money.
Before you go about matching the left hand side to the right hand side right away,pay your insurance premiums and top up that emergency fund. And then you are free to dream and fund those dreams.
While money is the means with which you can live the life of your dreams,you need to respect it too since each penny you earn can satisfy multiple wants. Chase your dreams but dont forget the advice of the old gentleman by adding wisdom and foresight to your financial plan.
Author is Founder & CEO,Freedom Financial Planners