I failed miserably when trying to set a budget last year.
I have my SIPs running. On a particular day of every month, money gets debited from my account and goes into my portfolio of funds. So my investing is on track.
But I spend way too much. A very cursory inventory on my outgoings made me realise that my highest discretionary spend in 2022 was on takeout and restaurant dining (NOT my grocery bill). It is embarrassingly high. No matter how hard I tried to curb it down, it was futile.
I would fix a budget that permits me to binge on outside food. I would violate it. I would feel guilty. And I would do it again and again.
Not only was I spending a pretty tidy amount on eating out, I also (falsely) bought into the notion that I cannot save more.
This year, I am trying to tackle this from another angle. I won't think in terms of money anymore. I will now look at it in terms of work hours.
My 3-step process:
- Calculate my hourly paycheck.
- Every Sunday, do an audit on my "eating out". In simple words, just add up how much I spent that week.
- Convert the amount of money spent into the equivalent hours of work for that week.
What do I hope to achieve? Looking at it from a different lens may help me spend less on takeaway and cook more frequently.
3 wealth-creation hacks
When it comes to creating wealth, you need to tackle it from various aspects. Investing is not only about money. It is about your desires, what drives you, your human capital, and your relationship with debt. Get these three right and you are on a solid financial footing.
5 things to do to avoid being financially fragile
What is your line of defense? Are you covering yourself and your family from all angles, or relying on assumptions? To avoid being financially fragile, here’s how to fortify your portfolio.
Wish you financial success in 2023!
Larissa Fernand is an Investment Specialist and Senior Editor for Morningstar India. You can follow her on Twitter
.
