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Are you fiscally prudent?Free birds with no responsibilities and freedom to spend, spend and spend limitlessly
Mrin Agarwal
Last Updated IST
Mrin Agarwal, founder-director, Finsafe India
Mrin Agarwal, founder-director, Finsafe India

Ah! The joy of being young. Free birds with no responsibilities and freedom to spend, spend and spend limitlessly.

Take the case of Jyoti, 26, who has been working in a startup for 4 years. Jyoti is happy to stay independently, with friends. She earns Rs 70,000 per month, yet is constantly asking friends for money to pay off her bills.

She is very brand conscious and spends on high-end clothes, outings and expensive makeup. She has started pushing her parents to give her money to clear her outstanding loans and bills.

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What I find surprising about people like Jyoti is that they are so conscious about looking good and having a fancy lifestyle but are not money conscious. How do they expect to have the kind of life they are clamouring for without saving enough money?

Youngsters face a lot of peer pressure and many times people make fun of them when they talk about savings or brand them as being cheap.

There seems no middle path – either you spend or you don’t. But there is a middle path and that is - being financially conscious.

Being fiscally prudent doesn’t mean not having fun, but focusing on what is necessary and adds value to life over bothering about what others think or keeping up with others. The benefits of being money conscious is having less debt and more money in the long term.

But to do this, one needs to give up on some short-term pleasures. I suggested to the parents to certainly not give Jyoti the money without anything in return. At the least, the money lent would be a loan.

If they have given her independence in every aspect, why are they making her financially dependent on them? In the future too, she would rely on parents to get her out of a financial mess and would never understand how to manage finances.

I also asked Jyoti why she wants to be financially dependent on others when she is independent in all other areas.

I questioned Jyoti on why she is not financially conscious when she focuses so much on her physical appearance and is mindful of health and is image conscious. Just like one wants to have good physical health, isn’t financial health important to lead a stress-free life.

Does she feel good about asking money from others and being constantly hounded to pay back. Does she not realize how this can impact her image negatively?

More than image, one needs to be financially conscious as it allows you to face difficult situations and helps you save for bigger goals. Millennials are known to be environment conscious, but this life of fast fashion and consumption doesn’t gel with those beliefs.

The most important resolution for 2022 for a better life should be to become financially conscious. In order to get financially conscious, Assume responsibility Check your current financial standing Put yourself on a spending freeze Pay off all debts as soon as possible.

Try to refinance higher interest loans with cheaper loans like gold loans.

Once you have cleared the loans, follow the 30/30/40 rule with 30 per cent going towards expenses, 30 per cent towards EMIs and 40 per cent being invested.

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(Published 02 January 2022, 21:19 IST)