Money Habits: Take Surprises In Your Stride

Dipayan Mukherjee, 41, a mid-career professional based in Delhi, has a plan for his money. His salary is carefully divided between systematic investment plans (SIPs), retirement savings, emergency fund, and annual goals. He tracks his cash flows, reviews his portfolio, and knows where his money is going. Holidays are budgeted for, investments are reviewed, and large expenses are rarely impulsive.

When a new turn in life comes along—a sabbatical, an overseas course, or an impromptu travel requirement—his first instinct is to see how it fits into his plan before making a decision.

That instinct is a planner’s strength. Planning turns vague aspirations into specific goals, creates savings and investment systems, prepares for emergencies and also reduces reliance on fleeting motivation or market sentiment. It brings order to money decisions and also makes it easier to take calculated risks because goals, timelines and asset allocation have already been thought through.

The problem arises when life doesn’t fit into the plan. At such junctures, inflexibility can create roadblocks and cause financial anxiety.

Life Doesn’t Follow A Plan

A financial plan necessarily rests on assumptions about income, inflation, returns, expenses, and future goals. The difficulty arises when life refuses to follow the plan.

A pandemic can upset assumptions about income and expenses. A child may suddenly decide to study abroad, change career tracks, or pursue entrepreneurship. An ageing parent may need more support than expected. Even positive changes—a better job in another city or an investment opportunity—may demand a decision much sooner than the spreadsheet had anticipated.

For planners, the challenge is not learning to take risk. It is learning when the plan itself needs to move.

Says Amit Suri, certified financial planner (CFP), founder and CEO, AUM Wealth: “The simplest way is to remember that a financial plan is a guide, not a rulebook. Life will change. Income will change. Goals will change. Markets will change. So, the plan will need to change too.”

This is where a planner’s instinct for control can become counterproductive. Someone who has earmarked every rupee may hesitate to redirect money even when circumstances warrant it.

Nita Menezes, CFP, author and founder of Financially Smart, a financial education ecosystem, makes a distinction between having a financial plan and financial planning. The former can become static; the latter is an ongoing process. She describes a financial advisor as a “Sherpa on the trek or the pilot of your flight”, helping clients revisit the route when conditions change rather than abandoning the destination.

Leave Room For Surprises

Planning for emergencies is not the same as trying to provide financially for every conceivable event. Excessive buffers can often become inefficient.

Says Suri: “An emergency fund should take care of real emergencies. It shouldn’t become a reserve for everything that might go wrong.” If someone needs Rs 10 lakh as an emergency reserve, but keeps aside Rs 5 lakh just because it feels safer, the extra Rs 15 lakh may offer little additional security, while losing out on earning better returns.

Flexibility can instead be built into the plan through adequate insurance, sensible emergency reserves and asset allocation spread across horizons.

Don’t Delay Decisions

There is another less obvious risk: planners can sometimes take too long to act. A market correction may create an opportunity for a strategic allocation; an attractive property or career opportunity may have a short window; a change in tax or investment rules may require portfolio adjustments.

Waiting until every variable fits the original model can mean missing the moment altogether. That does not mean abandoning due diligence. It means recognising that calculated decisions sometimes have to be made with incomplete information.

Menezes says true financial intelligence is not about eliminating risk but “managing risk intelligently through a balanced, holistic view”.

Discipline remains a planner’s superpower. But the strongest plan isn’t the one that predicts life perfectly. It’s one that is sturdy enough to absorb the shocks, flexible enough to change course, and clear enough to tell you when it’s okay to do so.

Your Superpower

You are on top of your financial life. Your determination and clarity about how you want your life to unfold will ensure you make the most of your money

Your Blind Spots

Your love for planning could make you over-cautious and non-experimental

You may be fixated on your financial goals, and forget to enjoy the present

Not every plan goes as expected, so one has to be ready for changes and upsets

meghna@outlookindia.com