Spiritual gurus constantly remind us - “Live in the present.” It looks like people have taken that literally. What spiritual gurus want us to do is to enjoy the present moment and live life in the current moment, without the baggage of the past and any onerous expectation or anxiety about what may happen in future. Their advice is in the context that people forget to appreciate the God-given present in which they happen to be in and instead worry about the past or future, thereby ruining the present too!
People today are earning decent incomes, which infuse them with a certain swagger and a general lift-in-life. Life is good for many of them - lulling them into thinking that this is life from hereon. What happens as an upshot of such thinking is that the lifestyle gets an overhaul and spends rise exponentially. While there is nothing wrong with that, many find that expenses catch up amazingly fast with their income.
Let’s take a look at the enchanted life some of them manage to live… until they realise much later that such a life would set them up for an uncertain future.
**Living it up:**When incomes are good, people increase their expenses in line with their incomes. They won’t feel any pain as they will have enough to go around. The life of comfort and luxury is intoxicating. Everything looks like basic necessities - the foreign holidays, the club memberships, entertainment and parties, luxury apartments and what not.
It is easy to get drawn deeper into it without ever realising it. But expenses close in fast. They get a sinking feeling, much like someone stuck in quicksand. We seem to be bent on snatching defeat from the portals of victory.
It is at such times we have seen people borrowing just to keep up the pretenses. Credit cards, personal loans, gold loans etc. are used to prop up their make-believe world from crumbling. But it will have to.
**The lifestyle you can afford:**The lifestyle you can afford should not be the one you should live! A prudent practice would be to live a couple of levels below that level. That way, there will be no pressure at all. A simple example would be to go for a hatchback car, when one can afford a mid-range luxury car. That way, incurring the expenses pertaining to the car will be quite easy. The same rule should apply everywhere.
Even if one has the money to put the children in a fancy school, it is better to avoid that. In such schools, the peer expectations will be sky-high. I have heard of children from such schools going to Europe and US for holidays, every summer! Now that can be taxing for even the well-heeled. Would it not be a better idea then, to put one’s ward in a school providing good education, than the fancy schools that would set your ganglions throbbing?
Keeping the lifestyle at the same level and allowing the income to balloon over time would bring in a level of contentment and peace that needs to be experienced to appreciate that sublime feeling.
A cap on expenses:The basic principle in life is not to get carried away. Keeping a tab on the expenses is essential. That way one can consciously put some distance between income and expenses. Better still would be to simply invest the sum that needs to be put away for long-term goals, at the beginning of the month itself. That way, one could spend the rest with gay abandon!
**Focus on the big rocks:**We need to give attention to retirement funding, children’s education funding, marriage etc. We seldom give these things the attention that they deserve. We just do some token investments and hope like hell they will be sufficient. They won’t be. We lavish out attention on the rather pedestrian birthday parties and holidays… nothing wrong with that, as long as we don’t neglect the truly important things in life. But, we do.
Keep the eyes peeled open on the most important goals. Invest in a manner that your truly important goals could be achieved. Once that is ensured, one can channelise resources towards other, lesser goals
Stick to the plan: If you are asking what plan, you are in trouble. Draw up a broad blueprint to achieve life goals. The path you need to travel to fulfill your mandate in life should be clear. Having a plan alone is not enough… following it up with necessary action is equally important. In fact, consistent, disciplined action is what would make the plan work.
All you need to do for this is to allow the native good sense to guide you and keep your feet firmly planted on terra firma. That will ensure that the present is well managed and the future perfect.
The author is a Certified Financial Planer and founder of www.ladder7.co.in