How My Biggest Financial Mistake in 2010 is Affecting My Personal Finance Goals in 2011

by Vinaya HS on January 24, 2011

in Finance

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You already know that I’ve made an extremely stupid mistake due to which I’m now looking at an income tax liability in the upper five figures! This means I’ll simply be unable to meet all of my financial goals over the next three months (because I really won’t have much to call as a salary). Since I know that I can’t meet all my goals, I’ll need to prioritize as to which ones I need to continue through this tough period and which ones I can postpone.

But, before all that, let’s see what my current set of goals are.

Short-term goals (for me these are less than a year away)

  • Contribute Rs Z into my Travel and Living fund each month.

Medium-term goals (for me these are between one year and three years away)

  • Contribute Rs M each month into my Swift-replacement fund. Period: April, 2010 through March, 2013. (I do a SIP into a Conservative Allocation Mutual Fund for this purpose.)

Long-term goals (for me these are more than three years away)

Goals listed, here’s my thinking.

If I add up my monthly contributions into the Swift-repair fund, the Swift-replacement fund, and the Travel and Living Fund, their sum is more or less equal to the additional income tax that I’d be paying each month up to March. Since these goals aren’t that critical and can be stopped/postponed, I will stop/postpone them. What a lucky coincidence!

PS: I know that I’ve said that Travel is my #1 goal — but I guess paying income tax takes precedence!

For the next three months, I will, however, continue to contribute into my emergency fund and into my Financial Independence portfolio since these are critical goals and can’t be compromised upon.

All this just because I made one stupid mistake!




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{ 1 comment… read it below or add one }

Maya August 12, 2011 at 3:26 PM

Hi!
I just came across your blog and find it very clean and clear. I just wanted to ask you somethings, so that I don’t make bigger mistakes, which I know I am already doing.

I am 27 years old, single independent woman in Delhi. My annual income is 8lacs and my rent is 12,000 and right now my monthly TDS is 5700 (eeks). I donate rs. 7000 to an NGO.
My asset portfolio is EPF of rs. 6000 pm which my employers match the sum.
I am planning to invest:
1) rs. 3000 pm in PPF
2) rs. 20,000 in infrastructure bonds

I want to save and invest more so I was wondering what else I can do to maximize my savings and investments! Or how should I go about it!
Thanks!

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