16 Money Lessons I Learned In 2016

By BankBazaar | December 15, 2016

money-lessons-that-i-learned-in-2016

The beginning of 2016 was just like 2015, 2014 and all the years before that. Basically, like every year, I made a long list of New Year resolutions. Things I want to change, things I want to buy, places I want to visit, skills I want to learn, pay off Credit Card dues etc., etc. That’s how most of us start every New Year, isn’t it? This New Year resolution list might be extremely lengthy, but in the end, most of us would be hard-pressed to strike one or two things off it.

Maybe, if you’re extremely determined and motivated, things may work differently for you. But, at least in my case, my list of resolutions is usually found in a corner of my room, under a pile of dirty clothes (that I’d thought of washing as one of my New Year resolutions, by the way). This year, however, one thing was different. I wanted to be clear about my financial life and was willing to bring it back on track instead of going overboard with my spending. Instead of focusing on my wants, I wanted to prioritise well and think about my needs first (for a change).

I can’t claim to be totally successful in achieving my goals for 2016, but I’ll give myself some credit for at least making an effort. Now that we’re in the last month of this year, it makes sense to think about my achievements and lessons learned during the year. I may not have achieved a lot (in line with my financial goals), but I sure made a start. That’s what actually counts, doesn’t it?

Anyway, based on the things I learned this year, here are 16 money lessons I can share (hoping they’ll be of some use to you guys as well):

Lesson #1: It’s Okay To Be Materialistic Sometimes

I know we’ve always been told that it’s wrong to be materialistic. I used to believe it too; until 2016 happened. Like a lot of other crucial lessons, this year also taught me that’s it’s okay to let go sometimes. How did that happen? Well, I love to collect watches, but the one I wanted was never on sale. I contemplated swiping my Credit Card since I couldn’t afford it, but luckily, a friend advised me against it and instead convinced me to save up. Since the watch was slightly expensive and there were other expenses to take care of, I realised that I needed to save for at least a couple of months.

The moral of this story- being materialistic is okay as long as you have it all planned. Don’t let temptations make you go blind.

Additional Reading: 6 Lazy Habits To Build Your Savings

Lesson #2: Planning Ahead Helps. Really!

This is one thing I never ever used to believe in. I used to think that living in the present is the best thing you can do. It helps you stay carefree and stress-free. Nothing wrong with that, since it does help simplify a lot of things. But what I didn’t know was the fact that things change a bit when it comes to your finances. No matter what your current financial situation is, you must have a fairly clear idea of where you’re headed. This includes being sure about your short and long-term goals. For instance, if you plan on buying your own house next year, you must start planning early. It may seem terribly boring, but planning in advance helps sort a lot of things out.

If you have big financial goals in mind, then you must start investing in the right places. This is when all those savings instruments like Fixed Deposits, Recurring Deposits, etc. can come in handy. Don’t let your finances surprise you. Trust me, those aren’t the type of surprises that would make you jump for joy.

Additional Reading: 5 Common Financial Planning Mistakes

Lesson #3: Spending On Others Makes You Happier

Happiness is probably one of the best feelings in life and is certainly something we all strive to achieve. Your financial situation has a major role to play when it comes to keeping you happy. Pampering yourself once in a while is something that can double your happiness. All those spas, massages, holidays, shopping, etc. can certainly make you happy.

But, what I learned this year was something totally different. There’s another way of making yourself happy. Try spending on people you love. There’s nothing that can make you happier than seeing your loved ones happy and smiling. You don’t need to shower them with expensive gifts all the time. All you need to do is focus on the little things. Trust me, the smiles on their faces will make you happier than splurging on your favourite gadget. Just give it a shot!

Additional Reading: 5 Better Ways To Spend Your Money Than Buying The iPhone 7

Lesson #4: Needs Over Wants. Any Day.

I’m the kind of person who never really understood the difference between needs and wants. Understanding the difference between these two words was one of the major achievements of this year for me.

Like most other people, I decided to finally work on my body and joined a gym. One day, while running on the treadmill, I heard a loud thump. I had dropped my expensive, new phone, shattering the screen in the process. Like the glass screen of my dead phone, I felt shattered too. I basically had two options. I could either just swipe my card and get the same phone again, or I could compromise a bit on the quality and go in for a cheaper phone.

What I needed was a device that could keep me connected to the world. But, what I wanted was the same, exact, expensive phone that had all those cool features. This is the real difference between needs and wants. What’s indispensable is a need. What can be compromised on, and is essentially just an aspiration for you, is a want. The magic lies in knowing the difference between the two and acting accordingly. So, before making your next impulsive buy, think about what I just told you.

Additional Reading: Align Your Needs With Your Financial Goals

Lesson #5: Time Is Money. Literally.

As clichéd as it sounds, time actually is money. All those sales and discounts don’t last forever. You really need to act on time to make the most of them. Unfortunately, no matter how many sales I go to, I never seem to find anything I like. My eyes are always fixated on expensive ‘new arrivals’. This still doesn’t mean that I’ve lost hope. I still try my best to look for cool things during sales and always check for discounts before buying things I need.

Doing the right things at the right time always makes a difference. If you’re into stock market trading, you’d really understand the value of time. Buying and selling at the right time is the key to making profits. There are many ways to look at this, but time sure is money.

Additional Reading: When Is The Right Time To Buy Term Life Insurance

Lesson #6: Financial Goals Are Crucial

Being ‘aimless’ is probably one of the worst things you can ever do to yourself. Whether it has to do with your professional life or your finances; you always need to be sure about ‘the plan’. Leaving everything to chance is definitely not a great plan. Being ambitious is good, but don’t always try to aim for the stars.

Before making any huge financial plans for your future, it’s better to think about your current situation. You don’t want to strain your present money situation based on something you want five years down the line. So, depending on what your goals are, make a plan. But remember, plans are useless unless you actually act on them.

All you need to do is sit down with a piece of paper and a pen and list your short and long-term goals down. It helped me feel more focused than ever before and gave me a clear idea of where my money is going and coming from.

Additional Reading: Map Your Financial Goals, Plan For It!

Lesson #7: Make Use Of Technology To Help You Budget

The next step is budgeting. Now, this doesn’t always mean keeping an accounting book and making a note of everything you spend. If you think it’s too much, and you hate dealing with numbers, don’t worry! There’s another way out for you.

You must have heard of all those money management apps, right? All you need to do is enter some details about your financial goals, your current financial situation and places you need to spend on. Instead of getting lost in all the calculations and math that budgeting entails, it’s better to leave it up to technology. Let these apps help you like they’ve helped me.

Additional Reading: 10 Tips To Using Your Mobile Wallets Right

Lesson #8: There Are Times When You Lose Control

No matter how many times people advise you to ride slow, an empty road sometimes gives you an adrenaline rush and you end up going past that 80 km/hr mark. Don’t get me wrong, though! I’m not encouraging you to ride fast. What I mean is that we all lose control sometimes.

A broken heart, a dead-end job, and other similar reasons are enough to drive your Credit Card spending through the roof in your pursuit of happiness. Doesn’t matter where you spend the money. That completely depends on your idea of mental therapy. Losing control is okay every now and then, just as long as you know your limits.

Additional Reading: Getting Control Of Your Finances

Lesson #9: Lending A Helping Hand Is Good

Having people you can fall back on is one of the best things that can ever happen to you. Sometimes, even more so than your family, it’s your friends who are always there for you. I’m sure that, like me, you also have people you can bank upon. Whether it’s something as serious as financial trouble or something as small as them sending you cupcakes in the middle of the night just to help you fight a bad day; they are always there.

The point is—never ever hold yourself back from helping these people. You need to be there and lend them a helping hand (financially and otherwise) before they even ask for help. Financial troubles come and go but these people must be cherished forever.

Additional Reading: Should You Be Lending Money To A Friend?

Lesson #10: Savings Can Be Your Knight In Shining Armour

If no one ever told you about the importance of savings or they did and you ignored them anyway; you better pay heed, mate! Start saving as early as you can. It’s for your own good. Keeping some money aside might be a bit difficult in the beginning, but there will be times when your savings will actually come in handy. Don’t wait for the right time. Whenever you start IS the right time.

So, what are you waiting for? Analyse your needs and hit the start button. Now!

Additional Reading: How To Get Started On Your Savings

Lesson #11: Health Is Wealth. Yes, It Is.

Whatever you do, never ever ignore your health. Staying healthy might not always seem easy but it can help you save a lot in the long run. Instead of postponing those plans of working out, get a membership at that gym you’ve been avoiding all this while. Just because it’s expensive doesn’t mean it won’t work well for you. It might hurt your pocket a bit now, but later, it’ll help you save on those unnecessary medical bills.

Thinking long-term is the key here. Opt for healthier food options, eat fresh, avoid junk food, and exercise regularly. That’s all there is to it.

Additional Reading: Assessing Your Fiscal Fitness

Lesson # 12: Buy In Bulk. Save Like A Hulk.

Hulk may or may not save, but you, my friend, need to. Buying in bulk might need Hulk-like powers. Carrying all those heavy shopping bags from grocery stores isn’t easy after all. Buying a 10 kg rice bag might sound like an expensive option. However, if you calculate well, buying in bulk is way better than buying the same stuff in smaller quantities.

Hate hitting the grocery store? Does laziness often take over your rational decision-making powers? No worries! Thanks to all the technology around, you have so many online grocery shopping apps these days. Just download any of them and start buying the basic monthly stuff in bulk.

Additional Reading: Time To Go Cashless

Lesson #13: Quality Over Quantity. Any Day!

Whether it’s about the people you spend time with or the products you buy, quality must always win over quantity. You can’t always get the best of both worlds anyway. Choosing better quality stuff might be the more expensive route to take, but it helps you save more in the long run. Since it’s better quality, it will surely last longer than something you bought just for the sake of buying.

Never settle for something just because it’s cheaper. Bad quality things don’t last long and you’ll have to buy them all over again later. Better get it right the first time, right?

Additional Reading: PE Ratio. Buy Quality Stocks At Bargain Prices

Lesson #14: Invest Now. Enjoy Later.

Investments form an important part of your financial life. Even if you’re clueless about where to invest and what to do (just like me), I’d suggest you consult a financial expert.

All you need to do is explain everything about your financial situation as well as your future goals. It shouldn’t take them much time to come up with a suitable plan for you. You’ll then know where to invest and what to do with your money. Better than wasting it and feeling clueless, right?

Additional Reading: Tips To Become An Investing Expert

Lesson #15: Going Cashless Is A Smart Decision.

With the demonetisation move, the most crucial lesson of this year, for me, was the need to go cashless. Don’t worry! You don’t need to crib about it anymore. Most shops (no matter how small) accept online payments these days. You can either use your Debit/ Credit Card to make payments or just transfer money using an online wallet like Paytm. As simple as that!

Going cashless has its benefits. No need to carry a heavy wallet everywhere and go through the ‘I don’t have change’ torture. Just take out your plastic buddy or use your online wallet, transfer the exact amount and you’re done. How cool and convenient is that? I don’t know about you, but I personally love the idea.

Additional Reading: The Cashless Economy Dream

Lesson #16: Math Can Be Good For You (And Your Money)

If you’re like me and suffer from math-o-phobia, it’s time you face your fears! I’m not asking you to become a mathematical wizard. But, you sure need to make some calculations. The most important part of these calculations is your tax. I know, I know! It sounds quite complicated. Take some help from people who are pros at it and crunch your numbers accordingly. It helped me and I’m sure you won’t regret doing this either.

Like most other years, 2016 has been quite eventful (at least for me)! Since it’s already that time of the year when we all start thinking about our New Year resolutions for the next year, the lessons I learned this year might help you.

If you have some money lessons to share, feel free to comment in the comments section below.

The opinions expressed in this article are the author’s own and do not reflect the view of BankBazaar.com.

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