Ranjan Varma

Changing the way we learn and manage our money

Archive for the ‘Rupee101’ category

Rupee101: Setting Financial Goals

October 10th, 2009

Setting a financial goal is the first step to achieving your financial objectives and creating a sustainable spending plan. That’s why, we are starting with this topic on our Rupee101 series.

Happy, Lucky and Chintamani (Who are they?) have come to Agra. It has been a long planned getaway for the three of them, along with Happy’s and Chintamani’s family.

During the journey, Happy told Chintamani that he wanted to start investing.

Chintamani: So, what are your goals?

Happy: Goals? I just want to invest my money, that’s all.

Chintamani: Let’s say you want to go to Agra. Like we are going. That’s like investing. But there are a whole lot of things that has to be done before you go to Agra.

Happy: Like?

Lucky: Arre, you need to decide you want to go to Agra first. And not to Timbucktoo!

Chintamani: Yes. And there are things like tickets, packing, arranging money for food, Booking hotels for stay, etc.

Happy: Ya, I got it. Okay, but how do I decide my financial goals?

$\Trip to Agra\$

SMART Goals

Goal setting is your map to reaching your financial dreams. Questions to ask yourself are:
Where do you want to go?
What is your vision for the future?
What would you do with your money if you didn’t have bills to pay or debt to extinguish?

Dreaming is a big part of goal setting. Let your imagination go wild: what would you like your financial future to look like?

But do remember to keep it SMART. SMART stands for Specific, Measurable, Attainable, Realistic, and Timeline

Needs and Wants

Before spending money on a goal, think about how important it is and whether it’s a want or a need. Ask yourself:

Why do I want this?
Do I really need this?
What is most important right now?

Taking Care of a Few Things

Having decided your financial goals is a very educative affair. It teaches you a lot about yourself and your own life. Having done that, a few things are worth taking note of. They are:

1. The time frame for your goals can be broadly classified into short term and long term goals. You may have a intermediate goal for say, 5-6 years, too.

2. If you find that after all of your planning and goal setting, your dream isn’t attainable as is? Does that mean you scrap the whole dream and move on to the next item on the list? Maybe! But there might also be another solution for you: consider “stepping down” your dream.

The Step-Down goal allows you to achieve a version of your dream. It may not be the exact goal you had in mind, but it will get you to the similar destination.

For example, if you want to go to Las Vegas, the step down goal would be to go to Goa and have fun.

Does this help you with setting your own financial goals? Let me know how I can improve this post and the series on Rupee101.

Welcome back! Join me on this journey to improving our financial IQ and sharing what we know. Updates at RSS feed or Email. And spread the word please Thank You!

Coming Soon! A Personal Finance Workshop & Software "RupeeManager". Stay tuned

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Posted in Budgeting, Rupee101

Happy, Lucky & Chintamani And Rupee101

October 8th, 2009

Meet Happy, Lucky and Chintamani.

$\Happy_Lucky_Chintamani\$

Gururaj Singh (Happy), Sunil Pandey (Lucky) and Mani Iyer (ChintaMani) are unlikely of friends. The three of them were born decade/s after each other and have very different occupations and lifestyles. But still they are very good friends. How? We will tell you, but a bit of each one of them first.

Happy is 33 years old and runs a small business. Happy lives in a rented place with his vivacious wife and two small kids. This Sardar loves his Patiala peg and takes life as it comes. He has a gut instinct of managing his money and though he doesn’t understand the number crunching & jargons, he is fairly comfortable with his own money management skills. And he wants to take his business to the next level.

Lucky is just 24 and has joined a MBA course. His parents doubt that he will complete the two year course. Though he starts everything with a lot of enthusiasm, he gets bored with it very soon. He has dabbled with so many ideas and has left them midway all too soon. He has worked in Call Centers, started some trading activities, day traded stocks and commodities. Lucky thinks he’ll get lucky and gets restless at the waiting.

ChintaMani is 42. He is employed by a leading Bank and stays at their staff quarters along with his wife and two children, a 14 yr old daughter and a 10 year old son. Savings has been in his genes as his parents saved everything they could lay their hands on. From their salary to every nut & bolts used in the house. ChintaMani is progressive and wants to move ahead from just savings to a few investments. Right now, he is confused between two themes: One, “you can’t teach an old dog new tricks” and two, “learning never stops”.

Now you’re curious that how such different people can become friends. Neighbours? No, they were not even neighbours. There’s a clue above.

All of them wanted better control of their money. And they thought that some education was required. So they joined an Executive MBA course together. And they ended up being in the same class and group. Normally the group of students working on project assignments given by the Faculty keeps on changing. But the three guys begged, cajoled the Faculty to keep them in the same group.

And now they are buddy friends. We bring to you the uncensored version of the discussions between Happy, Lucky and ChintaMani. Some of it may be on Rupee101!

Rupee101 would be a series of posts on managing your rupee. It will cover the basics of setting financial goals, savings, tracking expenses, budgeting and ofcourse, investing.

Stay tuned. Do you have your own wish list for me? Tell me in the comments below.

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Posted in Budgeting, Investing gyaan, Rupee101, Savings