‘We always want it all’ but then, life is about choices. Therefore, goal setting and more importantly, prioritising becomes important. But it does become a difficult task sometimes. With the aspirations of many members entwined in different goals, it is important to see all are kept happy. The decisions are doubly difficult as they come in the way of each other.
Compromises will have to be made – some goals may have to be scaled down, some of them would have to be pushed into the future and some may have to be completely dropped. Let us face it. There are some goals which cannot be compromised – like children’s education, one’s own retirement etc. We understand that in our heart of hearts. But when your neighbour is going gaga over the latest trip to Europe, you would not be at fault if you crave to see the Swiss Alps and the fjords of Norway. This is where our mind starts playing games.
We may start rationalising that children’s college education is a long way off and trick ourselves into believing that even if we spend a few lakhs in a trip abroad, we can still bounce back, in time. But, that is delusional and a nice way to just push our current fantasies upfront. Dreams and fantasies too have to be planned. Unfortunately, they come lower down on the totem pole.
| SAVING FOR YOUR GOALS * Do not dip into the pool set aside for important goals like children’s education * Invest your incentives, bonus, ex-gratia payments and so on to help meet your discretionary goals * Cut back small amounts of your monthly expenses and put that amount into a savings pool * Higher cash flows from a change in job can be used to meet goals * If you can compromise or postpone a goal, it could help in funding the more important ones |
Prioritisation will have to be reinstated on the throne. Suffice to say that the important, truly non-negotiable goals should be kept on top. The prioritisation should be explicitly done and resources identified for the truly important goals. For instance, one may want to keep the Provident Fund contributions, PPF account accumulations, pension funds and other retirement benefits for taking care of retirement phase funding. If this is the identified source, then these cannot be dipped into, for any other goal. Similarly, for children’s education, if the source is an insurance policy, FDs invested for them, their PPF accounts & monthly SIP investments, then that should be left alone too.
The other dreams, especially ones that are discretionary in nature, but which have now caught your fancy, can also be made to fly, with some planning and some adjustments.
What is life without a little spice and wispy-winged fantasy? Dreams can be planned for. I know that it sounds unromantic. But, think about it… we could always scrape a little here and push away a bit there on a monthly basis and maybe, it will happen in due course after all! That is a bit of a let-down, as this may be years away. Granted. But, the main fact is that it can be achieved. And, that by itself should be spur enough. Also, if you were to make a game of it, the uphill trudge, would actually be an interesting trek.
Let’s see how that could be done. Identify first, how some money needs be accumulated. The incentives, bonus, ex-gratia payments etc. are generally spent, without much thought, right? Now, you could invest these, to further your dreams. Secondly, look at your expenses closely. Are there possibilities for savings? We are not even talking of major cutbacks. Even a Rs 2,000-3,000 per month expense reduction would translate to Rs 24,000 - 36,000 annualised savings. It helps. Thirdly, in some cases, a change in job brings in new, higher cash flows, bringing the dream that much closer. Fourthly, if one is willing to compromise on one of the other goals, like say a car change, a new mobile purchase, jewellery purchase and such others, then again things become easy. Compromise need not mean dropping them altogether. It may entail a scale down of that goal, a push back or even dropping a particular goal.
The cost of a foreign tour can also be brought down based on the time of travel. Subject to feasibility of travelling in an off-season, costs can be brought down. Also, the costs can be brought down based on the tour duration.
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So, the point I’m trying to make is that a dream close to one’s heart can be achieved with a bit of patience, planning and follow through. It takes time though. The main thing to note here is that, it does not come at the cost of any of the significant goals that one has in life. Prioritisation and proper allocation of resources is important. Even more important is the discipline and will to not disturb allocations to important goals.
The writer is a certified financial planner