We all know that money is the most important thing to live a happy and respected life. We all have a wish to earn more and more and also save a lot that ensures our life hassle-free. Here I am telling some money related tips which I got from my grandfather. My late grandfather lived a complete life. He died as a very happy man an 87. He was the most respected in our family.
He was an epitome of planning. He planned his life so well that even major surprises which sprung up in front of him were dealt with relative ease.
How could he do that!!!
That was the biggest myth considering he had 4 children (3 daughters whom he had to get married), 11 siblings to take care of with absolutely no support from his parents.
When I started working, I got my first salary of 5000 rupees (in 2005) which I spent till the last paise. He called me one day to his room and asked me what all did I do with my first salary.
I told him that I got presents to everyone at home and spent the rest partying.
Then he told me something which I’m following to this day.
- Plan every rupee you get extremely carefully.
- Save 30% of your total salary no matter how hard it is. Just keep the money aside as though it’s never yours. This saving is after the PF and other standard deductions.
- Pay off your loans no matter how hard it is for your survival. This will build the trust and people trust us more. Go hungry but never default on a loan. If you go hungry once then you will learn the lesson.
- Ensure yourself. Keep some amount aside which can be used to pay the insurance premium once in a year.
- Ensure that the above spends do not cross 70% of your total income. If at all it crosses then you are not planning financially well. Bring down the fixed expenses.
- With the remaining 30% of your income, don’t keep a single paise. Spend it till the last rupee. This is completely meant to spend. Finish off this amount.
I had argued that 30% is not sufficient at all. After 12 years of following his advice, I understand 30% is more than sufficient.
I religiously followed his advice. The result, I was able to own my own house, a small plot and a car, all within 10 years of working. And I’m a single earner in my family. My salary is nominal. Well within 1lakh per month. Of course, I earned some money from my on-site work contracts. But even with this money, I followed the same advice which he gave me.
Some other gems from him
Don’t take a loan it if it exceeds more than 35% of your total income.
Give highest priority to family spends than personal spends. This way your family bonding is stronger.
Save always in the traditional way. It is always government savings like NSC or KVP and FD/RD. No investment in stocks or anywhere where the is risk to the principal amount.
Last but the biggest gem of an advice which he has me right after my marriage.
My wife is a homemaker. Instead of spending myself on all household things, my grandpa told me to give my wife a “salary”. Increase it as and when my salary increases as well. This made me completely free of thinking about household expenses as my wife started to take care of everything. Believe me, she started saving some money in the”salary” which I used to give her.
She even buys her own jewelry with her saved money. And gifts me on my birthday as well.
By now I understood his secret. It was nothing but financial discipline. When you are financially disciplined everything else falls in place.
I still miss my grandfather. He was a great man with responsibility and deeply connected to his family.
He passed away peacefully on July 2016. I’m very lucky to have spent a lot of time with my grandfather.