Mastering Personal Finance Management

"Financial freedom is available to those who learn about it and work for it."--Robert Kiyosaki

Everyone wants to be financially secure or free from financial crisis.We may see  that people with higher education and good  positional status in profession struggles with the financial crisis  and it may wipe out their entire life effort. Some of the reasons could be lack of education on personal financial management right from childhood, myths about money and not giving focus on learning and improving the art of financial management. The earlier we start this art of learning in life, better will be our financial freedom.

Most of us think that personal finance is about earning through profession and savings. Actually it consists of four elements viz Earning, Spending, Saving and Investment

Earning:

       It is about earning in line with our potential, skill and knowledge.It is about increasing the competency to earn more through profession.

Spending:

 It is about the expense management, awareness of our lifestyle, spending and accounting. It is about the consciousness of our behavior on spending.

Saving:

  It is excess after spending. It is about awareness on savings consistency.

Investment:

It is about investing the savings or excess in right asset allocation like real estates, deposits, metals and stock markets etc..It is about awareness on right asset allocation, periodic checking of returns, and taking corrective actions on time.

   Planning and consistent execution of all four elements may assure the financial success.Even any one of the element does not give attention much, it may result into financial crisis. As said, it is an art, continuous learning process and can be learned at any age. Hence aware of your financial management behavior and action, you attract good things in life! 

Choice of response to experience determines growth

"The difference between average people and achieving people is their perception of and response to failure."-John C Maxwell

Everyone has success and failure experiences in life.What makes the difference between average and successful people is the interpretation or learning from such success and failure experiences.The way we are looking  at our experiences and taking further action only determines the growth.

For example, your boss is criticizing your attitude towards work and giving some feedbacks. Now you have three choices to respond to the criticism or experience.

Choice of response 1:

    Feeling guilty and becoming sad about the feedback. The consequence may be your self esteem may go down and you may be cribbing about the feedback.Self pity will be increasing and no corrective or forward thinking will take place

Choice of response 2:

    Start defending your position with justification to your boss.Probably you may win the argument, but may lose the sight of the truth in his feedback. You tend to build logics to justify your stand and in this process, you decline to look at the truth. No learning takes place to improve further.

Choice of response 3:

     Listen and seek further clarity. Do introspect. This may lead you to find more truth about yourself. In this process, your mind tends to analyze the fact and accept the need for corrective action for growth.

The choice that you are choosing to any experiences either good or bad determines the further growth or evolution.Hence, Be aware of responding to any experience and you attract good things in life!

Accept Reality first, and then act

"Acceptance of what has happened is the first step to overcoming the consequences of any misfortune."-William James

       When we come across some unexpected problems  /crisis situation either in workplace or in family, most of us have tendency to blame others for the situation or finding the reasons for the problem. Let us aware of the fact that any event is happening due to some causes, which may be within our control or beyond control. The event happened is happened and cannot be reversed.

      The successful people accept the situation or problem as such and immediately think of the solution to overcome rather than fixing the person or passing the responsibility to others. You shall connect this statement in sports or in business environment where there is timeline pressure. For example, you may recall the behavior demonstrated by the captain Dhoni during the 2011 world cup final match against Srilanka. In a given circumstance, he accepted the reality and took the responsibility to overcome by batting. That shows the behavior of accepting the reality and thinking the solutions rather than fixing the people or wasting time in analyzing.

     To be successful in business or in relationship, first let us accept the reality and think what we need to do to improve the situation.Later, as a continuous improvement, we can understand the root cause of the problem to avoid a recurrence in future. Accepting the reality is leadership mindset and can be developed with practice and you will attract Good Things in your Life.

Habits will determine your success

"We are what we repeatedly do.Excellence is not an act,but a habit."--Aristotle

         The habit can be defined as something you do regularly and often, which eventually becomes easy. For example, viewing television while taking food is a habit, attending meeting on time is a habit and for the successful people winning in every obstacle is a habit.

          Now let us understand the quality of habit and its impact on the probability of success or growth. For example, you want to have control of your financial security. If that is your goal, it demands some of the good habits like checking your expenses frequently, saving some percentage of your earnings, frequently looking at your investment portfolio for better returns etc. Those  habits  only lead  you  to financial freedom over a period of time.Similarly, you should not have bad habits like  buying all new gadgets, whether you really need it or not, investing in low productive assets  etc.  With reference to personal finance. Hence, the combination of good and bad habits related to personal finance only will determine your financial security.

          Similarly, each aspect of life like career advancement, business growth, and relationship require a set of good habits to be followed regularly and at the same time avoiding the bad habits. The choosing of good habits and consistently following only leads to achievement of success in any given area.

          Now re look at your habit pattern in any aspects and you attract good things in life!

Be aware of your emotions for positive results

"The sign of an intelligent people is their ability to control their emotions by the application of reason."--Marya Mannes

             As human beings, we are filled up with emotions.Every second, we are  experiencing  a different set of emotions  and those emotions  drive our  actions.The emotions can be positive emotions like happiness, energy, enthusiasm, etc. or can be limiting emotions like anger, sadness, worry, laziness etc.

            When we are in a positive state, our words, tone and actions will be positive whereas in limiting state, our actions leads into more chaos or unproductive. So be aware of in which state you are in at any point of time and change your state before taking any actions or communicating to others.

           One of the ways to change state instantly is by changing our physiology or body language. For example, imagine that you are in deep thinking or in a sad mood  and you are getting a phone call from your dearest friend.How quickly you are changing your state  into happiness? That moment you are changing your state just by changing your physiology.It is possible to change the state instantly with little focus on awareness and practice.

          The point is when you are taking any important decision or even talking to someone, aware of your state and change in a positive state. The result also will be positive. Hence, action is to observe the feelings that you are experiencing in each moment and change into a positive state.You will attract Good things in your Life.

Improve relationship by changing your perception

“People see what they want to see and what people want to see never has anything to do with the truth.” -- Roberto Bolano

            Most of us are struggling for maintaining good relationship with family members, colleagues, subordinates and with bosses in work environment. One of the reasons could be the perception we have formed about others and approaching them with the same perception forever.But the reality may be opposite to the perception.

            For example, we might have experienced a few irritable incidences with the boss and we have framed the perception that the boss is always “short tempered.” With the same frame of mind, we approach and response to him, but in reality, we may miss his other good qualities such as his grasping ability, communication skill, caring about people, business acumen etc..In this process, our relationship quality is strained.

             Similarly, we may approach our children  as “Average” based on their  academic performance, but we may miss to notice their other qualities such as memory, power, mingling with others, taking things easy  and so on.The point is if we frame some perception about people and approach, our quality of  relationship will be to the extent of perception. If we are a little bit flexible and start looking other qualities, the relationship quality may improve.

             Practicing this in real life seems to be difficult, but possible with awareness .Accept the people as such, approach them with flexible mind; you attract good things in life!

Improve confidence with small actions….

"You gain strength,courage and confidence by every experience in which you really stop to look fear in the face.You are able to say to yourself," i lived through this horrot.i can take the next thing that comes along."--Eleanor Roosevelt

          One of the survey  concludes that 85 % of the population suffers with low confidence issue. Improving the self-confidence is vital for growth and it cannot be improved  just overnight.It can be improved only by experiential  learning and  inculcating  positive reinforcement in the subconscious mind  with  more small success.

          For example, if you want to improve your confidence on public speaking skills, you cannot immediately  do  it in a large  crowd.Instead, you consciously experiment in a small group, take action  and taste the success. Your subconscious mind registers the successful event. Next time, when you are speaking  in  larger groups, your mind pushes you  with positive reinforcement  of earlier success and you may do well.Again the mind registers  this event  as  positive reinforcement. This way only, you can improve your confidence in public speaking.

          Similarly, if you want to take your business   to the next level, experiment with small, incremental target, be focused, take action, achieve it… this positive reinforcement  will help you to perform better in a high-level target achievement.

          Improving self confidence  is self driven, slow process, but more powerful forever. Hence the action plan is to identify the area in which you have low confidence level , take small action , taste the success  and this small success will help you to attract good things in life ! .