Inju, that was a good first intro post but I didn’t feel I understood what you said completely. Would you mind dumbing it down? What exactly is the Money Trail?
Oh, Yes! Sure. I wouldn’t mind that at all. In fact, the intention of the first post in this series was supposed to be just that. An intro post. Just to give you a flavor of what’s in store for you guys.
A quick recap on what I wrote about the money trail in the first post of the personal-finance series.
What is Money Trail
The money trail is the path your money takes. It includes your sources from which you make money, the inventory, where you keep your money and it includes the path it takes to get away from your inventory.
Sort of like any other path, you follow the money trail. This means, you follow each and every rupee and observe the trail/path it takes to get away from you.
But Inju, I remember you made some bold claims about this path telling me about myself.
Oh! Yes. Let me walk you through an example to demonstrate that.
I moved to Bangalore roughly 2.75 years ago. Let’s start with the journey of the money in my pocket right from the point of booking transportation in Hyderabad.
Journey: Hyderabad to Bangalore
Now, there are multiple ways I can reach Bangalore from Hyderabad.
The cheapest mode of transport was obviously Train.
Next up was Bus, with price ranging from as low as INR 700 to INR 3000.
The next option was to board a flight, which would’ve set me back by INR 4000 excluding the cab fare from my house 40 KMs from Hyderabad to the Airport and to reach the hotel in Bangalore which was another 80 km away from the Airport.
I made a deliberate choice to take the bus.
But Inju, couldn’t you have taken the train?
I didn’t. Coz I always preferred to be all by myself when traveling alone. I didn’t want casual strangers sticking their nose into my business or whatever reason I could cook up to convince myself to take the bus instead. And I am sure you do that too.
Every one of us take so much comfort in the lies we feed ourselves and I was and am not an exception. But the hilarious thing is, in spite of making such conscious deliberate choices, we still cry and complain that we don’t have enough money.
But Inju, that’s just a small difference of INR 350. Big deal?
Hmm, I knew this was coming. Let me continue on the choices I made in the journey to settling down in Bangalore. Once in Bangalore, I had to get around the city in search of a flat, as my initial sponsored accommodation was only for 15 days.
I had a choice again, do I commute using public transport or Uber/Ola or Rapido or rent a bike?
Which one should I pick?
Moving onto the choice of the accommodation itself. Below were the options that were available.
A bed in a 3-sharing PG, single bed in a 2-sharing PG, a shared room in an independent building, a single room in an independent building, a shared room in an apartment/society, a single room in an apartment/society?
Which one should I pick?
In case you were missing the point, the cost of each of those options is different. Based on the choice you make, the outflow of money from your pocket varies.
The cost of the life choices we make!
Now, let’s dig deeper.
Let’s talk about the daily commute to the office. Would you rather ride an Uber/Ola or Rapido or stay close to the office and walk or use public transport or get a personal vehicle?
If you are planning to buy a personal vehicle, would you buy a new one or second hand?
If you are buying a new one, will it be a normal commuter one like a Splendor or Passion Plus or would be it a mid-range sports bike like CBZ or Apache or Pulsar or a slightly more powerful one like a CBR 250r or chuck all the lowly automobiles and go for a Harley Davidson Street 750?
Now let’s get to our lifestyle choices. How much premium are you paying to have those three leaning sticks stuck on your t-shirt? Why do you care about it in the first place? or did you ever think about the numerous pairs of footwear you seldom wear? and what about that frequent time pass activity called weekend shopping? Or that ceremonious “friyay” evening of getting drunk and burning money?
Every freaking choice we make in life costs us money.
Every one of those choices is creating a unique trail for your money to walk out of your pocket. Few of those trails are so wide that the trail is sucking so much money or much worse, your money is making a huge queue and hiking along the trail.
But Inju, what’s the point of earning if you’re not doing the above things.
Bro, If you’re okay making such choices and not worrying about where the money is going. Then you wouldn’t be reading this wisdom in the first place.
Secondly, I absolutely agree with the fact that it’s an individual’s choice. If you’re making enough money, then no one is stopping you from buying that Mercedes S-Class. But you shouldn’t be buying one if you’re a lowly mid-tier manager in a fast-growing startup.
So, the bottom line is, those frequent deliberate choices you make are the sources of your money drain. Get an account of those choices, you will have a good understanding of your finances and if necessary, armed with this newfound realization backed by data, you can make some informed choices about your life.
A quote from one of my favorite philosophers, Seneca.
But Inju, It’s not like I don’t want to save but few are obligations!
This is by far the stupidest thing you can ever say to yourself. If for some reason, you have to start making such choices, the first thing you have to do is Pause.
Pause and ask yourself, why do you have to make that choice. What situations drove you to make that choice?
Is it societal? then would the group you are going out with care if you told them you can’t afford those things?
But Inju, How can I admit I can’t afford those things. It’ll be embarrassing.
Dude, I believe you have two choices for pretty much everything you want to do in life.
Listen and stand up for yourself or bow down to societal pressure.
If you can’t stand up for yourself, then it is a small Friday outing today, a big birthday party tomorrow, a weekend trip to a fancy resort the day after and it’ll be doomsday the day after.
So, to sum it up.
- Figure out where your money is going. Ideally, it should check out paisa to paisa. But we’re not perfect humans. So have a small but insignificant margin of error.
- Once you have the money trails figured out, think long and hard about the choices you’re making which resulted in the creation of those trails.
- Cut down on anything that you’re not strongly convinced about spending on.
- Stand up for yourself for this is your life and your god damn money.
I’ll conclude this blog post by leaving you guys with the below equation.
More Income can result in more savings, provided your expenses are constant.
Or lesser expenditure can also result in more savings, on a fixed income.
So that’s all today folks.
This is part #2 of the Money Matters with Inju- Series. Check out part #1 here. I have also created a Whatsapp group for having more 1:1 and in-depth discussions on topics I intend to cover in this series. Should you be interested, just drop your contact details in the comments section, I will contact you and share the invite link.
If we haven’t met before, I am Inju, a resident of the small planet called trailsofinju.com in the internet universe.
Apart from thinking about money, I play with words, my feet, my eyes, and my phone. That’s just me saying, I write stories, poems, travel a lot, read a lot and click pictures with my phone. You can find all of those works in the hyperlinks above.
If you’re interested you can pay a visit to my brothers on twitter planet and the Instagram planet and check on what they’re up to.
I almost forgot, I love feedback and if you have any feel free to drop it in the comments section. No pressure, your choice.
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Asta La Vista!
Until Next Time. Cheers.
[…] Let’s circle back to Alex and his bike purchase. Alex is very disciplined when it comes to managing his money. He earns well and spends responsibly. He is very rational when it comes to buying something. So, it is safe to say that an impulse purchase is an unlikely entry in his money trail. […]