~ RONIT SHAH
At the onset of the pandemic, a lot of people were financially struggling all over the world. They found it difficult to meet their daily requirements. But as time passes and a return to normalcy seems more plausible, most people still find it difficult to make ends meet. This could be because most people do not plan or budget their incomes or expenses. This leads to a situation where these individuals find themselves financially vulnerable.
Think about money as something with which everyone has a complex relationship. Money is not a fixed entity, but rather a complex set of data points, challenges, and opportunities that circle them and that they interact with. It’s a relationship that evolves over a lifetime. And financial planning is essential for maintaining this relationship. A few important things which we should keep in mind while planning our finances are:
- Savings: Wealth is nothing but an accumulation of all that’s left after spending. You can try and build wealth without a high income, but you have no chance of building wealth without a high savings rate.
- Knowing Compounding: The amazing thing here is how big something can grow from a relatively small change. Imagine, a thin layer of snow leftover from a cool summer, after a geological blink of an eye, the entire Earth is covered in miles thick ice. The big takeaway from the ice age is that you don’t need tremendous forces to create extraordinary results. Something that compounds over time could serve as fuel for growth. This tells us that periodic investments are very important for financial planning.
We have to understand that money has little to do with how smart you are and much to do with how you handle it. But trying to teach people how to handle money is tough, even to really smart people. This is the reason most people suffer from some kind of financial instability in their lives. And the best way to overcome this problem is by educating the masses about financial planning.
About the author:
Ronit Shah is a first-year student of B.Sc. (Actuarial Science and Quantitative Finance). He loves to play cricket and explore new places. He is always keen to learn.
