What Your Lifestyle Says About Your Financial Future

Money makes the world go round because let’s face it, without money, life is a bit harder. Right from basic necessities to the most decadent experiences, money can be your best friend or your worst enemy depending on how you treat it.

Now, how financially secure you are and what your future holds is dependent on a few factors – the amount of income generated, spending as well as investing habits. Curious about what your financial future will look like? The experts at MoneyView have come up with predictions based on some of our friends’ lifestyles!

Party Animal Parth 

Parth loves a good party! Morning or night, every time is a good time to celebrate life is his motto. But as the good vibes pour in, money flows out because a good party involves multiple gastronomic delights which are not very pocket-friendly. Parth does have some savings but his expenses are moving a lot faster than his savings can catch up.

Parth’s Savings – Occasional SIP when there aren’t too many celebrations, irregular payments towards a separate savings account

Parth’s Expenses – Rent and household bills, F&B expenses, travel expenses, miscellaneous 

Prediction: It is manageable now that Parth does not have a family to support and has a steady income but overtime bills can catch up. As important as savings are, so are investments such as mutual funds to help money grow. Our guess? A future that is not very financially secure.

Spendthrift Suzy

Suzy believes that having fun is possible when there is barely any money involved. Suzy ensures that she saves at least 40% of her income every month after all the expenses. While she does occasionally indulge in some shopping or travel, she ensures that a certain amount is set aside for the same and the budget is strictly followed. However, while she does save money, investing is not something she is wholly comfortable with due to the risk factor involved. 

Suzy’s Savings – Payments every month towards a separate savings account, RD, FD, small amount towards SIP

Suzy’s Expenses – Household bills, F&B expenses (minimal as she prepares most of her meals herself and rarely relies on takeout), miscellaneous

Prediction: A secure future for Suzy for sure but money thrives best when it can grow. Investing in a few low risk mutual funds is also advised. 

Investomaniac Ira

SIP, stocks, or other investment avenues – you name it, she has invested in it. While she does enjoy life to the fullest and is quite generous with her spending on the finer things in life, Ira ensures that she puts all of her surplus income into various investments. Additionally, most of her spending is from the money generated by her investments. A risk taker, Ira prefers investing over saving.

Ira’s Savings – SIP (low risk), the occasional payment to a savings account, mutual funds (high and low risk), and stocks mainly

Ira’s Expenses – Rent and other bills, shopping and occasional luxury purchases, miscellaneous 

Prediction: We totally agree with Ira’s enthusiasm regarding investments, however, depending completely on the income generated from this is not recommended as markets fluctuate. A mix of savings and investments is the ideal solution

So are you Parth, Suzy or Ira? While they come with their own strengths and weaknesses, in order to be financially secure certain steps need to be taken. 

We’ve put together a mini guide for you listing three of the most important steps that need to be taken in order to pretty much guarantee a secure financial future.

The 3-Step Foolproof Financial Guide 

• Have an emergency fund

Financial emergencies can strike at any time, therefore being prepared is imperative. These can include unexpected bills, medical emergencies, job losses, etc. This dedicated emergency fund should have at least 3 to 6 months’ worth of salary. Additionally, buying a life or medical insurance plan is also advised

• Plan a Budget and Stick to it

It’s easy to spend money and not realise how easily expenses catch up. Additionally, if you are the kind to shop impulsively then this step is extremely important. Making a budget will ensure that you have your finances planned for the month and any extra money can be saved or once in a while spent wisely as well. 

• Pay off Debts ASAP

Debts can pile up in no time. There are of course good debts and bad debts but there is nothing worse than the impact of a bad debt on your finances. Having a credit card is great for your finances as well as credit score if payments are made on time. However, using credit cards or loans for purchases that are unnecessary and depreciate with time is a recipe for disaster. If you come into a large sum of money see if foreclosing loans are an option as well.

There are of course a plethora of other steps that can be taken to ensure that your lifestyle affects your financial future positively. Live life to the fullest while ensuring that it doesn’t rack up debt or bankrupt you. Balance is the key in financial planning as is the case with everything in life.