From the Executive Editor

The first step to financial planning is financial literacy. And if you are waiting for a reason to begin, it is right in your hands.

Mr Gupta is one tough customer. He haggles with vegetable vendors to save a couple of rupees, is always on the alert for sales and discounts schemes and quibbles with domestic help—the maid, the dhobi, the driver. He saves a few hundred rupees every month through these small bargains. And then he signs away thousands—sometimes lakhs—of rupees blindly in insurance or funds that brokers ask him to invest in. He looks nowhere except for the x marks for signatures in the forms.

In many ways, Mr Gupta is Mr India—a penny-wise consumer, a pound-foolish investor. When it comes to consumption we spend hours looking for the best possible deal but when it comes to investment we take hasty, unconsidered decisions that have little or no bearing on our financial goals. Given the rising financial and job insecurity—which have come hand in hand with increasing levels of prosperity—such a casual and illiterate approach to investing is inexcusable.

Sure, many people have begun to think of financial planning. But they never get down to doing it. It’s not uncommon to hear ‘I will retire at 50’; ‘I will start my own business at 40’; ‘I will have a second career’... But thinking to plan is not planning—it’s daydreaming.

Sooner, not later, we all have to do financial planning of some sort. If you don’t do it by will, you may be in for a rude awakening. Take, for instance, the consequences of rolling over a credit card bill. If you run up a Rs 1 lakh bill and pay only a minimum amount due every month (5% of the outstanding) which grows at 2.95% every month, it will take you 25 years to pay off this debt and you would have paid Rs 1.34 lakh in interest alone!

The first step to financial planning is financial literacy. And if you are waiting for a reason to begin, it is right in your hands. Go straight to the list of  10 financial resolutions that could change your fortunes. We have not merely stated the resolutions but have worked out the calculation and rationale for each so that their importance not lost on you. It was a happy coincidence that Dipen Seth, MONEY TODAY’s first regular columnist, also decided to share his stock market resolutions. His Boom & Bust column will offer new insights into stock investing in an unputdownable style.

In working out the financial resolutions for you we also renew our resolve to ‘Make You Richer’ in 2007—and for years and decades afterwards.