I'm no finance whiz. But when it comes to money, I make enough to keep me happy and well… I’ve done my fair share of investments too. You'd think that would be enough, right? Apparently not! Here are five money lessons

Lesson #1: Save for rainy days.
Of course I do this already. It's just that I discovered that my idea of saving was a little warped.

When my salary comes in, I pay off all my bills, insurance premium and a couple of SIPs. Turns out, these are just investments. Savings are a whole other story.

So now, I am going to start a "contingency fund", which is equal to about three month's salary. What's a contingency fund? Well, it's money that you keep liquid in case of an emergency.

Lesson #2: Plan for retirement now.
No, I'm not planning to retire in the next five years. But apparently I've got to start planning now.

If you invest Rs 5000 every month at the rate of 10% p.a. for the next 25 years, you will have a retirement fund of Rs 66.34 lakhs! And if you start a year later, you'll have lost almost 7 lakhs and three years later, 18 lakhs. Ouch!

Moral of the story: the earlier you start, the more you have. So start from that very first pay check.

Lesson #3: Lifestyle shouldn't be a liability.
Right now, sadly, my lifestyle is my biggest liability. I blow up a big chunk of my salary on eating out and shopping for  clothes and shoes. It's a fetish I can't help; except now I'll have to. Well, it won't hurt so much to buy one less shirt a month, would it?

Lesson #4: Invest according to goals, not markets.
When I see a fund doing well, my immediate reaction is to want to invest in it. Big mistake!

If I need my money to buy a home/ car in the next three years, then investing in equity is just not a good idea. Should the markets crash, I will lose the money and will not be able to meet my goal. So, while debt gives back less, it will keep my money safe in the short term.

The rule: For short term goals ie two to three years, invest in debt and for long term goals ie seven to eight years, invest in equity. Of course, to do this you will need to actually have goals!

Lesson #5: Don't make investments just to save tax.
Come March and I'm making hurried investments. My main goal is to save tax! So whatever tax-saving scheme seems profitable at the time, I put my money into it.

From now on, I'm going to invest in schemes that help me meet my goals and save tax at the same time.

Lastly, the lesson that scared the living day lights out of me. Do you know when you have to make your will? The moment you have your first asset - a bank deposit, gold jewellery, shares… anything remotely valuable. Yikes! Now that I'm done with this story I'll probably get cracking on that :p

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