From Director’s Desk | Anirudh Dar

As I was researching for a corporate webinar, I came across a series of startling facts around individual finance. Almost 57% Indians have less than Rs 5000/- in their savings accounts. 50% of married Indians save less than 10% of their joint income and almost 30% of all Indians never invest their money – not even in bank fixed deposits! Looking at these statistics, we can safely say that most of us haven’t achieved any sort of financial freedom. But let us first understand what is financial freedom?

Financial freedom means having sufficient savings, investments, and cash on hand to live the kind of life we desire for our families and ourselves. It also means growing our savings to enable us to retire at a time of our choosing, or pursuinga career we want without worrying about how much we earn each year. Financial freedom means our money is working for us rather than the other way around.

But how do we arrive there? For starters, it needs to begin by first understanding where you are todayfinancially and where you want to be eventually. This week, let’s talk discretionary goals for a change! You may want to travel the world, buy electronic gadgets every year and go shopping for the latest fashion trends. Unfortunately all of these things will cost money and the life cycle of these purchases or experiences may not even last a lifetime, or in some cases, a season. So how would you justify putting discretionary goals ahead of the more prominent and life-lasting ones. Needless to say, this can only happen if you are compartmentalising all of your needs in a certain order of priority.

Start by knowing how much you earn. Then remove the certain expenses from that – like rent and EMIs etc. What is left each month after deducting ALL outflows is your discretionary cash surplus. Now, start putting aside these small surpluses each month and build a larger corpus which will then come in handy for when you feel the urge to just splurge. It is alright if you can’t afford the new Apple iPhone this year. A new one will come next year too.

Rome wasn’t built in one day. Your savings wont either. But every small step you take today will make it less harder for you to gift yourself what your heart truly desires. After all, we don’t want to just live from pay check to pay check. Let us all attain our financial freedom by taking the first baby step today.