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Personal Finance

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Today, we will touch upon an interesting topic which is important but is least discussed. We will discuss Personal Finance and why it is important? 


First understand what is it?


Personal Finance is how you manage your money through expenditure, saving and investments.

It means personally financing yourselves for future.

Whether you have enough money for your essential monthly bills or you want to plan for your retirement, this is all personal finance.

Basically, it is a smart way to handle your money and having it when you need it.  

Sadly, our system hasn’t given much importance to this. 

Why is Personal Finance important?

Any reason to do that?

Personal finance is important for everyone.

Let’s understand this by simple example which you probably would’ve heard of-

There are 3 brothers. A, B, and C. A put its 100 Rs. with himself for 1 year. B puts his 100 Rs. in bank account with 3% interest. And C puts it in a mutual fund. 

Now after 1 year, taking the inflation rate at 6% for a year, A is left with Rs.94(in real terms), while B has with him 103, which amounts to Rs. 96.82 (in real terms) and C is better off with 113 Rs. (106.22 in real terms). 

Now, who you think is better? 

C managed his money in a better way. And thus enjoys his returns.

Same as this, most people don’t save money. They spend whatever they get from their business or from a job.

Later crying for money isn’t a solution.

Lets understand one more side of it-

If you buy a car today, for say, about Rs.300000 its value after 1 year is Rs. 250000. But what if you invest that money in a simple instrument, as a mutual fund. That money would be somewhere around Rs.3,36,000. (normal returns~12%)

This is just for one year. Imagine the difference when the amount is big and compounding is at play. Money keeps multiplying.

Although, the smart move would have been to buy that car from the dividend or the extra amount that you made from your investments.

Now, if you think when you buy, your wants are satisfied and you eye for your next desire.

But if you save and invest, you are one step ahead of everyone.

Also, personal finance is not just investing money but saving it for the future when you are going to retire or if you want your kids to study at a good institution.

 It also helps you in dealing with unexpected bills and calamities that arrive in your life like medical bills , and , ofcourse, Covid-19. 

And most importantly things are gonna get expensive. And the value of money will depreciate over time.

So, how you should be spending ?

That’s simple. 

As Warren Buffet says, Do not save what is left after spending but spend what is left after saving. 

Moreover, keep your money aside for saving and investing. 

Even for a student, saving as little as Rs. 500 helps in the future, It’s more about the habit.

Cutting back on unnecessary expense and putting it in SIP of Mutual Fund every month is a good way to start with if you ask us:)

Put it into various assets and instruments like gold, real estate, equity, debt, among various others. 

As saved money helps you later. 

It can be used in buying capital intensive things like house, car or mobile phone you always dreamt of.

To turn any dream into reality, one needs to plan.

How to manage your finances?

Managing your money isn’t French. Anyone with little knowledge can do that.

First step comes when you save it.

First start saving. Then start investing rather than spending.

You can choose it to be invest among various assets and instruments which would provide interest or dividends for your money.

Putting it in a bank account seldom helps. Inflation eats your real value of monies. 

You probably would’ve heard of Sushil Kumar, winner of the Indian show ‘Kaun Banega Crorepati ’ who was the first individual to win Rs. 5 crores.

Due to him spending all the money and little investing in assets which he did not have the idea of, ventures which failed and several other poor financial decisions led him to the place where he was before.

He lost all his money. Although, he earns his living by selling milk of buffalo, an investment he made. Read more here

Poorly planned investing is worse than not investing at all.

Take expert advice. Invest in safe instruments like an Index Fund which always has appreciated over time.

Invest and save according to your needs, risk appetite and capacity.


You may be earning Rs 1,00,000 a month and still be carving for money while someone may be earning Rs. 25,000 a month and living a happier and financially secure life than you. 

It’s how you choose it to be. 

Reading all this, you get a better idea on how to use your money. Investing and financing yourself is all about habit.

After knowing all these facts, educated people are not failing to plan but planning to fail.

So, Start seeing where your money goes.

The sooner someone starts to plan their finances, the better. 

Identify where you want to put your money.

However, no investment is best one.

Until then……..

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