As the year is coming to an end, I am self reflecting and the following thought came to mind: personal finance is altruistic in nature. In a society that often equates financial success with self-interest, it’s essential to revisit the true essence of personal finance. Far from being a selfish endeavor, managing one’s finances well is a deeply altruistic and noble act, primarily because it is rooted in the desire to protect and provide for one’s loved ones. I wrote this article to discuss how personal finance, through its various facets, is fundamentally about safeguarding the future of those we hold dear.
At its core, personal finance is not just about numbers and bank balances; it’s about people and relationships. This becomes evident when we consider the various aspects of financial planning.
1. Insurance: The Protective Veil
“Getting covered by insurance is to protect your loved ones.” Insurance, be it life, health, or disability, is not merely a financial product. It’s a commitment to the well-being of one’s family and dependents. When you buy insurance, you are getting it on the premise that when you are incapable of providing for your loved ones, the insurance policy will ensure that both you and your family are taken care of. You ensure that your loved ones are shielded from financial hardships in the face of unforeseen circumstances.
2. Investing: Building a Secure Future
Similarly, the act of investing is often seen as a path to personal wealth. However, when viewed through the lens of altruism, “investing for the future is to protect your loved ones.” By strategically growing their wealth, you are not just securing your own future but are also ensuring that your family’s needs and goals, such as education, home ownership, and comfortable retirement, are met without compromise.
Beyond just meeting the bare minimum, investments essentially aims to provide freedom and options for your family, when the time arises. Nothing says more about altruism when investment is about sacrificing current pleasures for later benefits, which one may not get to enjoy personally.
3. Estate Planning: The Act of Care
Estate planning often brings thoughts of legacies and inheritance. But at its heart, “estate planning is to protect your loved ones.” It’s about making thoughtful decisions today to avoid future complications for those who will carry on after us. It’s a clear expression of love and care, ensuring that our assets are distributed as per our wishes and that our loved ones are not burdened with legal hassles and unnecessary conflicts during difficult times.
The Ripple Effect: From Individual to Community
The nobility in managing personal finances lies not just in the outcomes but also in the values it instills. The process of financial planning fosters responsibility, discipline, and a forward-thinking mindset. These virtues contribute positively to the moral fabric of society.
The impact of sound personal finance stretches beyond the individual. Financially secure individuals create stable homes and advocate for financial literacy, which in turn nurture communities that thrive on economic participation and mutual support. This ripple effect is a testament to the communal benefits of personal financial responsibility.
Conclusion
This article has become more philosophical than intended but I still think it is worth the spiritual trip. Ultimately the former arguments of planning for your loved ones come more naturally as its direct impacts are obvious. But the latter points of impacts perpetuating across community is not far-fetched. I could see friends benefitting from folks who are more financially savvy in the group.
Reframing personal finance in the context of altruism allows us to see it as more than just a pursuit of individual wealth. It is, fundamentally, an act of love and responsibility towards those we cherish. By securing our financial future, we are not only affirming our commitment to our loved ones but also contributing to the broader social good. Personal finance, therefore, is not just a smart choice; it is a noble and altruistic path.
Guides are useful to read but templates put action into context. Family and friends have been asking how I track, monitor and review my finances. I created some personal finance templates for my personal use and found them to be helpful in making my plans/actions more concrete.
While I am sorting them out and including instructions, you can find those that are available here: https://pocketmint.gumroad.com/.