How to enjoy a comfortable standard of living?
You must have heard of the saying that, "too much of a good thing can make you sick". In simple words, right things done in excess can harm you. We are always taught from our childhood thatwe must save as much as we can for safeguarding our future. However, is it right to save most of your earnings and not spend anything for your and your family's enjoyment and comfort?
The answer to that question is no. You don't need to sacrifice all your wishes today to enjoy a better tomorrow. You see, there are many things which you might not be able to do when you age as health issues might become a deterrent. There would be several opportunities that might not strike your door again as the golden time would have passed. And, if you constantly keep sacrificing all your desires at present then you would probably repent by the time you grow old. Does this mean that you should not save at all and rather enjoy your life how much ever you can?
Again, the answer is absolutely no. Saving for your goals (especially retirement) is extremely important. Moreover, having adequate contingency reserves and appropriate insurance coverage (both life and health) are imperative if you wish to have a healthy financial life. However, if you undertake proper planning, then you will not only be able to meet expenses and save for your goals, but also manage to improve your standard of living.
In order to do this, you must manage your finances in a prudent manner. You must create a financial plan either independently (if you have the time and expertise) or with the help of an unbiased and experienced financial planner. While undertaking this activity, you should first set aside at least 6 to 12 months of your expenses in a savings bank account or liquid fund for unforeseen emergencies that may arise in the future (such as - medical expenses, loss of job etc.). Thereafter, you must make a list of all your financial goals and the time remaining for achieving them. Also, determine the future value of the money that would be required to fulfill your goals. Chalk out a suitable asset allocation pattern and calculate the amount that you need to invest per month to achieve your goals. Before making fresh investments, review your existing investments to analyse how many of those are suitable to your risk appetite and financial goals. Make sure that you have an adequate life and health insurance coverage as the financial future of your family is dependent on you.
Once you know how much you need to invest for the future, you can easily spend a small portion of your earnings for enjoying a comfortable lifestyle today. You can increase your family outings, learn that sport which you have always wanted to learn, let your children explore their passion in the area of art, music or anything else that they desire. Heard of the saying - live today like there's no tomorrow? Don't let the fear of the future spoil your present.
PersonalFN is of the view that appropriate financial planning can help you meet all your financial goals and at the same time enable you to have surplus cash to enhance your standard of living. Although achieving financial security and improving your financial health should be your first priority, you must make efforts to let yourself and your family capitalise on the pleasant opportunities that life has to offer today!
PersonalFN is a Mumbai based personal finance firm offering Financial Planning and Mutual Fund Research services.
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