I have always wondered why our educational system doesn't talk about money at all.

While money is an indispensable part of everyone's life (unless you are still living in a jungle where you and others are dependent on the barter system), we are taught next to nothing about managing it, be it for ourselves or for others. While some part of money management for others (as in Corporates) is taught in the CA, CFA, and MBA (Finance) programs, what about managing our own money?

Generally, people tend to learn about personal management of money via experiences of their own, but that, in my opinion, is not a great idea. Because as Eleanor Roosevelt says, "Learn from the mistakes of others. You can't live long enough to make them all yourself.

Another way of learning is by the tacit knowledge transfer from our parents and elders and observations that we have made in our homes while growing up. But given the generation, we are a part of, not listening to our parents (Read - Getting advice) has become a fad. Also, they (our parents) don't really understand that the spending patterns for us (Millennials and Gen Z) are far more complex than what was the case for them, which makes the matter even worse for learning even if someone has the motivation to do that.


Now that we have talked of the gap that exists, I think it's high time that we talk about solutions.

While I was trying to search for the answers (obviously over the internet), I couldn't find one place where one could find all the answers; I also had to keep jumping from one site to another, and the content/advise most of them were offering was not that great in terms of quality and implementation. The same was true for the notable books that teach you to be rich, while they include some great fundas, but the implementation problem still hovers around our head. Moreover, not everyone can set up a business to create an optimal net zero tax credit; neither can one pay oneself first if they are a salaried employee and are living hand to mouth (Read Paycheck to Paycheck). At the same time, all this sounds very fascinating as it can help you grow decadent; the implementation part is a huge question, especially in the Indian context where a lot of the fundas mentioned in the legendary books are not even legal, leave the part of being implementable.


There are five main parts to the personal finance equation, and if we are able to optimize them, most of the things (more than 90%) would fall in place:

1. Earnings:

The first thing to do is record your earnings from various sources, and if you have only one source (that is your salary), you would need to find ways to diversify your income sources. A subpart to this head would be to optimize your income in such a way that you minimize the tax you have to pay in, which would then increase your in hand

2. Spending:

The second thing to do is to list down your spending streams and patterns and optimize it according to your salary, see if you are living beyond your means, and if that is true, then its time to cut down expenses


3. Saving:

Is an essential part of the equation here and is the basis for going beyond, if your spending is leaving you with nothing then there is no point of going ahead, but if it's not then it would be wise to understand various saving instruments and how you can use them to your benefit. As a thumb rule, you should put aside money equivalent to your expenses for six months in liquid (cash) with you as a rainy day (more like rainy months) fund

4. Investing:

Once you have enough savings in place, it's time to invest money so as to beat inflation and not end up working for the rest of your life; with the stock market rush in the last year, I don't think there is a way anyone of you is listening (reading) this beyond stocks, but for those of you who are, I have written a Millennial's guide to Personal Finance called "Casual Finance" which is available on all the major e-commerce platforms, including Amazon, Kindle, and Flipkart. It is an essential read for people who are developing a sense of how money works and had been recommended by Dr. Radhakrishnan Pillai, CA Akhilesh Bhargava, The Hindu, and The Times of India.


5. Protection:

The final leg to this money equation is protecting yourself and your money so that you don't have to work until you die, and neither is your family (Read dependents) impacted financially (while the emotional impact is inevitable) in case of your death / serious injury leading to disability.


All the things that I have mentioned above are just the starting points of learning. There is much more in the picture that is to be learned before you could go ahead apply all of this to your lives, but this is an excellent place to start with. For more learning, you can always look up my book, "Casual Finance- A Millennial's Guide to Personal Finance which is available on Amazon, Kindle, and Flipkart.


About the Author:
Anuj Suneja, an Applied Psychology graduate from Delhi University, holds an MBA from IIM Visakhapatnam. He has been an avid trader and investor for five years now. Having worked with startups, EY, and Govt of Gujarat has exposed him to diverse outlooks of what money looks like for people of different generations. He enjoys solo bike rides and interactions with new perspectives.