Financial Prudence

Financial prudence lies in balancing one’s income and expenditure. It is a simple truth. A disciplined and steadfast financial approach with stress on savings is the most practical way of improving your financial health. Most of us are not born with a silver spoon in their mouth and therefore have to work hard to create assets from the scratch. Besides discipline and steadfastness another factor is also very important in financial prudence, which is to be patient. Assets cannot be created overnight as it takes considerable time and sustained effort to achieve a good financial status. Many learned people have given their views on this aspect, however I find advice of Warren Buffet as most practical. The following points are worth considering.

Warren Buffet’s Mantras.

1. Do not save what is left after spending. Spend what is left after saving.
2. Chains of habit are too light to be felt until they are too heavy to be broken.
3. Don’t buy things you do not need, you will soon sell things you need.
4. Someone is sitting in the shade today because someone planted a tree a
Long time ago.
5. Should you find yourself in a chronically leaking boat, energy devoted to
Changing vessels is likely to be more productive than energy devoted in patching leaks.
6. Risk comes from not knowing what you are doing.
7. No matter how great the talent or efforts, some things just take time. You cannot produce a baby in one month by getting nine women pregnant.
8. Simple behaviour is always more effective than complex behaviour.


I am in full agreement with above principles as I have seen their efficacy in managing my own financial affairs. Allow me to add my two penny bit and that is the principle of “Value for Money” while making purchases. We must compare various options and carry out the cost benefit analysis before making any purchase major or minor and should only proceed if it gives us value for money. Let us therefore, inculcate the habit of financial prudence to whatever extent one can.



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