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Understanding Your Money
Handle with Care
Yo! Vanakkam vanakkam!
Nice writing this to you this wonderful morning!
I’m writing this letter to you about Money, unga college la solli tharaadhadhu.
Not teaching you Finance. But, money. Just Dealing with Money.
This is your follow-up letter from your previous MTH letter!
Ippo, today we’ll just dive deeper into dealing with your money, among your MTH.
Recap
Managing money ndradhu, is not about being rich; or being smart nu kooda illa.
Just understanding how it works, and staying with some control over your thoughts and emotions.
“Enna nae solreenga? Understanding ok, control over thoughts and emotions eppdi Money management ku udhavum?, — this can be your question.
Aana simple — tell me why did you buy this phone that you’re using now? Was it because, you really needed all the freaking features from this? Illena, because you loved the design, or because your classmates have/suggested it?
Innoru example — our dress kadai ku poreenga? How would you choose a dress? Because you love it, or because the mannequins looked stunning with it, or even worse — because there was an offer that looked amazing?
Seri, whatever — onnu mattum sollikuren.
You don’t need to make a lot of money, you just need to “handle” it.
Handling Your Money
Aama, “handle“ it — and let me tell you - it’s not simple as it sounds.
Using a fancy Money manager App is not going to help you handle it better.
Kekkudhu, mind voice kekkudhu — “Bro, money eh illa. Appram enna bro handle panradhu?“
You know what? You don’t need a salary to start handling money.
Don’t you receive pocket money every month? For some of you every week, and daily some of you. Theriyum theriyum.
“Chinna amount vachu enna bro panradhu?” - adhaan ah?
Haha, 10 one rupee makes ten rupees. 10 ten rupees makes a hundred, and you know how it goes.
So, next 10 days ku ensure you keep 10 Rs aside from your pocket money, and after 10 days, you have 100 Rs. Saving 10 Rs a day is no big deal, but having 100 Rs on a fine day when you need it — is something, la?
Now see, there are 3 parts to handling money, adhula first and fore more thing is to document it.
Documenting
“Vroooo, idhulayum documenting ah?“ — Ada, aama pa! I’m not here to teach new financial terms but to enable you to take ground-level actions with what you know already. Athaan, mudinja varaikkum, we’ll stick to our existing processes.
Similar process, but a different context.
Where you apply this process will differ and make a whole new sense to you!! Seriya?
Nambi thaan aaganum. Already sonna maadhri, the belief system is the ultimate core system that enables all your other systems.
Seri, ready ah?
✅ Ippo download your bank statement for the last month
Bank statement ah? Appdina? Adhu summa oru paper thaan, with a table of all your transactions. Yaarukku money send pannirukka, and yaaru ungakku send pannirukkaanga, etc.
Interestingly, you’ll also find ippdi money send and receive panradhukku how much you are paying to the bank as commission nu.
“Ennadhu? Kaasu anuppuradhukku kaasah?” - Haha, there’s a lot to this. Later paapom. But, for now our goal is to document everything.
✅ Next uh, write (document) them down one by one in a Notebook
Not a paper, not on your phone or computer. On a Journal / Notebook.
As you have listed down your transactions, ippo categorise them into these primary categories — Food, Travel, Shopping, Medical, Personal
“bro, I already have an app for this, where all of these are listed already, naannum ah pannanum?“
Yes, nee thaan pa modhalla pannanum. What you see is the end result or an insight of your transactions.
At least for the next 3 months, notebook & pencil use pannunga. Appram ah Excel sheet ku move pannikkalaam, and later on Fancy Apps use pannikkalaam.
Document pannittu parakka vittuta use illa. Adhukku correct action edukkanum.
✅ Plan and Take Action
We’re all good at seeing the insights, and think, or even speak about it. But, when it comes to action, no. We usually don’t take it seriously. illa, unmai thaan. No offence.
To take an action, or to make your brain + mind take this action, you need to do this manually.
Circle the ones that are recurring every month.
Underline the ones that are one-time payment you had to do.
Box the ones that could’ve been avoided
You’ll know where you’re spending the max, and work upon avoiding them.
Your circles will help you to plan your budget for upcoming month.
Your underlines can give you an insight into your unplanned spendings.
Repeat this process for at least 3 months.
Edhukku 3 months na, it is the least amount of time for you to take an action consistently, to reduce your Boxes.
“Avlo thaan handling money ah?” - handling avlo easy na, yen ellarum eh panna maatraanga? There’s more to it.
Handling better mattum pathadhu, you need to understand how it works!!
Adhukku modhalla you need to have some money. So, let’s save first.
Save for Emergency before you Spend
Last newsletter la, sonna maadhri before even you think about spending, pick up 10%-20% of your pocket money or the money you earn (aama pa, some of our community members are already earning) to a different account.
Jupyter nu oru App irukku. You can create some savings called “Pots”, which you can save and use it later. I have seen this feature, but enakku thevai padala. Because, I have 2 bank accounts, and I only spend from one of them. So the other one is always a saving.
“Appdi evlo thaan bro save panradhu? Andha money ah use pannave koodadha?”
Neenga use panna vendaam. Adhuve use aagirum!!
Haha, save panradhu use pannaati eppdi? Aana, I wish you don’t get a need to spend your savings.
So, think of the maximum amount you may need for an emergency… like your laptop going for repair, your phone getting broke, etc.
See, how much amount would you need for these?
Pick up the highest amount, and have at least x2 of that amount saved always.
Ippo puriyudha, yen I wish you don’t get a need to spend your savings nu? hehe.
This is crucial. Recently, namma community la Shifan got his laptop repaired, and I was shocked to know how much it costed for a simple laptop repair.
Even last week one of the college students (not part of our community) asked me for a temporary laptop because his laptop got into some issue, and he did not have money to repair it.
Appo, once savings pochu na, avlo thaan ah? - yes, kind of. But, once you save the money, you’re safe. Athaan 2x of the emergency need vaikka sonnen eh.
Even if something happens during your recovery of the first half of your savings, you will be able to manage through.
Ippo, let’s say — you’ve saved the 2x of expected emergency. What next?
Aduthadhu neenga yosikka vendiyadhu… Insuring — a lifesaving concept!!
Insure before you go broke; seriously.
Why Insurance is life saving? Though there are a number of insurances you can choose to take up, like Life/Term Insurance, Health Insurance, etc (I’ll write more about it in other weeks) you should consider taking an insurance for any costly gadget you buy.
“Ennadhu, insurance for gadgets ah?”
Onnu periya scene la illa… Active Protection Plan or Additional Warranty nu laam nukelvi patrukkeengala? Adhu vera onnum illa, insurance thaan.
“Adhu seri, Gadget ke veetla kaasu kudukka maataanga… idhula insurance enga?”
Neenga ninaikkura maadhri avlo periya amount la illa. Actually konjam periya amount thaan, but imagine a situation - neenga aasai aasai ah oru nalla phone vaangureenga. Vaangitu 15 days la it fell from your study table accidentally, and salli salli ya norungiruchu… 😩
Enna pannuveenga? Repair laam kandippa too costly. Pudhu phones la chance eh illa. If you’ve spent a little more to Buy a Protection, then you’re safe now. Ahem, ahem.
For now you can visualise it like — you buying a phone, and protecting it with a good phone case/cover. You spend that extra 500/- for the phone case and tempered glass, to avoid a big loss if the phone falls and breaks without the case and tempered glass, right? Would you worry about paying that 500/- additional cost or worry about repairing or replacing the phone with the huge cost?
I can’t tell you that you must buy a protection plan for all your gadgets. It’s ok to skip if you’re good to keep things safe. Aana, if you’re a rough handler, then it’s worth buying a protection plan aka insurance.
I feel, Insurance eppdi work aagudhu nu you should know. But, innoru letter la solren. Because, it also has a strong correlation with community. We can speak more, if you’re interested.
Seri, Document panniyaachu, Save panrom, Insurance ok. Appram enna?
Invest ku la poradhukku munnadi, sila vishyangal miga miga avasiyam!!
Oru kutty story… with our analogy way…
Gym ku pona, starting la evlo Kg lift pannuveenga?
Onnu? Rendu? or max 2.5 to start with, la?
With that small weight, you train your muscles to function well. You practice the flow of your body parts, and the postures to maintain controlled movements, etc.
Only by practising gradually from using 2kg to 20kg, you’ll learn to deal with large weights! When you’re capable of lifting 25 Kg, you’ll not have trouble. Your muscles, hands legs, backbone everything will be under your control. The 25kg weight will not matter, but the practice you’ve done through out the months matters.
But, what if you waited for months and ore podu… 25 kg lift panna enna aagum?
Your body doesn’t even know how to deal with the stress you put, avlothaan… hands and muscles will feel everything new, and your body will stumble. Mudinchu. Simple ah sollanum na, mookku odayum, naakku thallirum!! 😮💨
The same applies to managing money as well. You don’t know when you will start to have more money. Start practising yourselves, to manage your money ippove, when you have the least possible money with you. Yen na…
1000/- per month irundha 900 spend pannittu 100 save pannuvom.
10000/- per month irundha kooda, 9900/- spend pannitty 100 thaan save pannuvom.
Eppdi 1000/- rupee ah spend pannuveengalo, adhu maadhri thaan 10,000 irundhaalum spend pannuveenga!!
Adhunaala thaan solren…
Be it documenting your money, insurance, investment or whatever it maybe — the smaller you start, the better it is; the earlier you start, the wiser it is!
Quote nalla irukku la… naan ezhudhunadhu thaan. eeee!
That’s it for this week! Read, digest, and come back with your doubts!
If you’re interested, let’s restart our Money Club, and start doing these practices! Enna solreenga? If 5 of you show interest in reinitiating our Money Club, then let’s do it right away from this February month!!
I will look for your comments!
Until then, take care of you, and your money!!
Cheers,GSThina 🚀