Financial Personality Part 1

Financial personality of an individual greatly depends on his parents attitude and upbringing. In my case, the habit of conserving every dollar (rupee) started with my mom's habits of saving saving and more saving. Some examples include, never taking the auto to office. Even when we were going out, we ended up taking multiple bus/trains to our destination. She tirelessly convinced us every time that we can go by public transportation instead of auto or taxi. Secondly, going out and eating was a quarterly event. Luckily for her not much convincing was needed here, as it was not that common those days and we did not demand it frequently. Same goes with buying new clothes, it only happened during important festivals like Diwali and Pongal. If i think about it now, things were more relaxed and organized. We know eating out, going to movie or buying new clothes will happen in a periodic fashion and will always look forward to it.

Hence, when I started earning money as an engineer, saving for the future was my first expense. Even though it might sound funny to call saving an expense, but the terminology reflects the culture of the spend first society we live in. I always started my monthly budget with a savings target and then planning the other expenses around that. I still remember those initial days when I started tracking my total balance in all accounts using an excel sheet. Month over month it was sweet to see the total balance increase slowly but surely. We spend around 50% of our awake hours to get this paycheck, The biggest expense of all "tax" takes away more than 25% of our earnings, even before our earnings reach our hand. So I guess, it was a no brainier to plan before we spend the rest. Expenses for rent, groceries, insurance, utilities are essential and only needs a little care to make sure we are meeting it modestly, Extensive planning is a must for rest of the spending.

It was this thought which enabled me to save more than 50% of my take home pay and improve my net worth considerably over the years. The passive income from savings starts to add to your income and further increases your savings percentage. It was at this time, I came across financial independence blogs like The Money Moustache, Retireby40 and several others. The habits that these blogs advertise are sometimes pretty strict, but a majority of these was inbuilt in my system due to my modest upbringing.