Let's talk Money before it is too late!

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An Indian family, sitting around the dining table for dinner engages in a hearty meal and a lively discussion on Sports, Politics, Movies, Music, Office gossip, day-to-day happenings and so much more. It is interesting to observe, while we all love to brainstorm so many topics; we seldom engage in a conversation about Money and Personal Finances, either with family or friends. Money, which we all are striving and toiling to earn in our day-to-day life, is mostly always missing from our daily banter and discussions.

Why do we stay at a tangent when it comes to discussing the matters of Finances?

●      Money (पैसा) is considered a very private affair in an Indian household. Owing to our cultural preferences and uncalled social prejudices, even basic discussion on Sex & Money is a big taboo. An open discussion on Money is frowned upon; our society perceives it as a negative aspect of an individual’s personality to the extent of attitudinizing the person as “Money Minded” or “self-indulgent”.

●      Being a Victim of miss-selling/ bad experience of financial products by sales agent’s make people uncomfortable and awkward to ‘not share financial information’ with anyone.

●      Lack of knowledge or interest also makes an individual insecure to discuss personal finances.

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Does running away from the “The Talk” makes it any better. Of course not!

It is crucial to share and discuss with your family, from very early on, about the nuances of Money Matters such as – total family income, expenses, assets, liabilities, insurance coverage, investments, etc. Involve the kids in the investments and tax discussions; make them prudent and independent from a young age.

These simple and vital steps will prepare your loved ones for exigencies or eventualities that may happen to the breadwinner of the family. It will make them confident; spare them from the anxiety, pain, and helplessness afterward. In more cases of than not, there is a lack of knowledge and a proper plan to monetize the family assets in need of the hour, which leads to distress.

All of us endure and work hard to make more money to have a better lifestyle, to experience a dream vacation, to take care of parents, kids, shop for latest gadgets, cars, clothes, new house and the list goes on. ‘Money’ is an indispensable goal of life, yet, no one wants to talk money openly & freely without any social and theological fright.

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The uncomfortable feeling of frailty due to monetary loss from some poor (uninformed) investment decisions holds us back to deliberate on our Money Matters. Remember, making mistakes with your finances is normal. Failure is simply the opportunity to begin again, this time more intelligently. Remember a bad decision can be reformed and salvaged with knowledge, open discussions, and professional advice.

“If you choose not to talk about ‘Money’ or take corrective measures, the situation is only going to magnify the bad investment decisions by digging a bigger embrasure on finances, over time.”

Along with the ‘Money Conversation’, a careful assessment of your lifestyle expenses is very crucial – be it personal grooming, fashion, dining, traveling, and more importantly the fundamental obligations such as education, healthcare, and retirement planning.

This exercise will help you introspect and raise urgent questions like –

●      Do we bother about the idle money sitting in a savings account at mediocre returns of 4%?

●      Does our income, expenses, returns from savings & investments match our continuous elevating standards of living?

●      Are we relying too much on future earnings by borrowing today?

The Annual increase in family expenses is much higher than earnings from traditional so called safe investment options; as a result, we are continuously losing on the real value of our hard-earned money.

De-facto, most of us do not think about such scenarios because we are hesitant of sharing our “money secrets” and facing reality.

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Issues like above, highlight the importance and vitality of a healthy and open financial discussion and analysis.

India with its best in class primary education system focuses on the all-round development of the child, however, it misses a very pressing and essential aspectual of Money Management and Personal Finance. Home is the first learning ground for a child and lets us take a small pledge to talk money & related matters more openly and freely as a part of Healthy Family Culture.

It is never too late to break the shackles of stereotypes on money matters and develop good habits that shall benefit society and you.

“The way we work hard to make money; it is even more important to make the money work harder for us.”

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Gavesh Mittal
Gavesh Mittal is a CFA Charterholder and Vice-President at IDFC First Bank
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