Personal Finance: Less of ‘Finance’, More of ‘Personal’

5 successful behaviors for financial success

I was reading Pattu Sir’s blog on do-it-yourself investing and this line captured my attention:-

Personal finance is less of ‘Finance’, more of ‘Personal’ Click To Tweet

I can’t agree more on this.

Preserving and growing wealth is more about the ‘personal’ (read behavioral) choices you make than the ‘finance’ knowledge you have.

What it means is that personal finance is more about practicing the behavior traits that help you towards financial success than the technical knowledge itself.

These behavioral traits test your commitment, passion and discipline towards how you handle your money.

Below, I have listed 5 such traits which can put you on fast track in your ‘Personal Finance’ journey.

#1 Record your expenses

Do you know what’s your total monthly expense?

And what’s the breakup across discretionary and non-discretionary spends?

If not, start recording your daily expenses. That’s a good way to start your personal finance journey.

Categorize the spends across

  • Groceries
  • Eating out
  • Utilities
  • Shopping & splurges
  • Fuel etc.

Do that for at least 6 months to get a complete picture of your monthly spending pattern.

Always remember:

You can't correct what you can’t measure. Click To Tweet

So start measuring your money outflow.That’s the best way to stop leakages.


Book Review_Secrets of the Millionaire Mind (2)

#2 Control your expenses (and emotions)

Analyze your spends month on month to see where you are going wrong.

Start this immediately after you have recorded expenses for your first month.

Based on step #1, always have a broad budget fro next month each category.

Idea is to stay within the budget.

If you think you are overspending, give yourself an expense target across each category.

You can also allocate a budget to ‘mindless spending’ as a category in your expense sheet.

This will ensure you enjoy your wealth without going beyond your means, at the same time you don’t have to compromise with your cravings every now and then.

#3. Stop comparing yourself with others

Don’t take me wrong.

My philosophy is not to suggest that you should stop enjoying your wealth. Your money should buy you goods, services and experiences that make your life easy and give you happiness.

But that doesn’t mean you spend on stuff just to impress others.

For example, it has become so common for many of us to buy iPhones on credit card EMIs or going on foreign vacation by taking a personal loan.

Ideally, debt should be taken to build productive assets (like education, real estate, business etc.) and not for spending on depreciating assets (like phones, vehicle, expensive luxury gifts etc.)

Practice this one single behavior and half your problems in life will be solved.

#4. Take things in control

Your wealth is your responsibility.

So learn the methods that will help you preserve and grow it.

Don’t run away from tax planning, investments, mutual funds, insurance etc.

Unless you are a millionaire (in USD equivalent), take charge of your money and your savings/ investments.

Don’t make an excuse that you don’t have time to understand finance. You simply can’t afford not to learn the basics of money.

Knowledge can always be acquired provided you have the intent to learn.


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#5 Practice discipline

Practice financial discipline in your life.

Some of the examples of financial discipline are:-

  • Planning your tax liabilities right in April
  • Paying credit card bills on time every single month
  • Reviewing your investments once in a quarter
  • Delayed gratification
  • Continuing with your SIPs despite the ups and downs of life/ market
  • Staying within budget, most of the times

If you are disciplined, the game is half won.

Thereafter, what you need is building knowledge that can enable you to maximize the wealth making opportunities.

Even if you go wrong with some of your financial decisions, being disciplined will ensure things even out in the long run.


Want to know if your behavior traits are aligned to financial success?

Just answer the following questions in a ‘yes’ or a ’no’.

  • Do you give in to your impulses quite often?
  • Are these impulses costly?
  • Are you too much concerned how people perceive you (and your worldly possessions)?
  • You spend your salary before you think of saving/investing?
  • Do you start your tax planning in December every year (when your employer asks for investment proofs)?
  • You don’t understand equity/stocks/mutual funds etc.? Worse, you have never put in an effort to build up your knowledge?

If you answered ‘Yes’ to most of the questions, it’s an indication that you need to fix your “Personal” stuff before you work on the “Finance” part.

Good news is that it’s not impossible to fix either.

All you need to do is start from the above mentioned 6 behaviors.

I am sure there are many more such behavioral aspects.

However, I personally relate to these 6 and they are now part of my second nature.

They have helped me stay on track and I am sure will help you too as well.

Let me know what’s your successful behavior trait that makes you financially successful.

Tushar Jain

About Tushar Jain

Tushar Jain is a personal finance enthusiast who loves to talk about money, savings, investments and spending. He blogs about financial wisdom and income growth habits at this blog jaintushar.com. Contact him to say Hi.
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