Updated: May 6, 2021
The 80-20 rule to spend without guilt or regrets.
I used to spend a lot, happily and to my heart's content. Enjoyed my life. Never felt guilty. After 35 years, I don't have any regrets either. You know why?
I followed a very simple philosophy. Save First. Spend the Rest.
Property, College Education. Jewellery. These are the only assets that create wealth for our children and grand-children. Me and my wife focused on these goals and ensured that we achieved them.
Does not matter whether you are earning Rs 20,000 PM or Rs 200,000 PM. My suggestion is, save 5-10% of your net monthly income - after deducting all the loan EMIs - as Gold. Because "we won't touch gold for ordinary expenses". It is also a safe investment for medium to long term goals.
You can then use the accumulated gold to buy jewellery or invest in property or fund your children's college education. Set aside another 5-10% in short term saving instruments such as SB/RD/FD. This is to take care of bulk expenditures. Now you are free to spend the balance 80% as you please.
People who follow this 80-20 rule, feel powerful and in control of their lives. They live life fully, and enjoy spending without any guilt or regrets.
What do you think of this 80-20 rule? Write to me with your comments and feedback.