Be­ing pre­pared in ad­vance means less worry in fu­ture

Mint Asia ST - - Otherviews - BKY AVE R I N AN­DAN


ex­penses are of­ten a cause of anx­i­ety if they are not planned in ad­vance. Strife be­tween couples be­cause of money mat­ters is also not un­com­mon. But Mum­bai-based Anusha Ra­maswamy and Shyam­prasad P. man­aged to avoid all these just by plan­ning in ad­vance. Here’s how.

Even as a young bachelor, while Shyam would spend all he earned, he knew he wanted a struc­tured fi­nan­cial plan be­cause he wanted to start a busi­ness of his own at some point and wanted to be pre­pared for the fi­nan­cial va­garies this may en­tail.

“I knew that when I started (plan­ning fi­nances), I wanted to do it right.” So, he de­cided to con­sult an ex­pert. And he was sure he didn’t want to go to an “agent”. “I can’t wrap my head around peo­ple buy­ing prod­ucts from some­one who gets a com­mis­sion from it,” he said.

Be­fore get­ting mar­ried, Anusha and Shyam worked for the same head­hunt­ing com­pany. “We dis­cussed our fi­nan­cials. But so many dis­cus­sions snow-balled. So we thought we should talk to an ex­pert and start with a clean slate,” said Anusha, who con­tin­ues to work with a head­hunt­ing com­pany.

When they ap­proached Melvin Joseph (who be­came their plan­ner) in mid-2016, their mar­riage was al­ready de­cided and so it got in­cluded into their over­all fi­nan­cial plan. Thanks to this, Anusha and Shyam were able to plan their wed­ding ex­penses.

“This part of the plan was based on our fixed salaries and bonuses,” said Shyam. While the wed­ding (in Thiru­vanan­th­pu­ram) took place with the sup­port of their par­ents, the cou­ple paid for their honey­moon in South Africa. The money that they re­ceived as gifts was in­vested in liq­uid funds.

Ready for busi­ness

Their fi­nan­cial plan was for long-term goals as well, es­pe­cially con­sid­er­ing that Shyam wanted to start a busi­ness of his own. They wanted to be pre­pared for this as well. “We did var­i­ous cal­cu­la­tions, even for worstcase sce­nar­ios,” he said. As part of this, Shyam cre­ated an emer­gency fund that had money for 6 months’ ex­penses, when he started the fran­chise busi­ness in June 2017. “I wanted a big-pic­ture as­set al­lo­ca­tion, so that the move didn’t feel like that big a risk. Ba­sic life events are taken care of. So, if I take on riskier ven­tures, I know where I stand,” said Shyam.

Hav­ing a fi­nan­cial plan also helped Anusha and Shyam be on the same page as far as goals were con­cerned. “The (first meet­ing with Melvin) was an eye-opener. We got a spread­sheet that cap­tured ev­ery­thing. I was liv­ing with my par­ents and still had some sav­ings. I also got a view of Shyam’s fi­nances,” said Anusha.

These dis­cus­sions helped them fig­ure out the goals. The main long-term goals were re­tire­ment and chil­dren’s ex­penses. “For these, we have in­vested in debt funds and SIPS (sys­tem­atic in­vest­ment plans) in equity funds,” said Anusha.

Mak­ing re­pairs

She also used this op­por­tu­nity to move to di­rect in­vest­ing. Anusha had SIPS from ear­lier as well, but through a bro­ker. “This was a per­son who had been deal­ing with me and my fam­ily for about 10 years. I re­alised that I didn’t have to do SIPS through him; I could have done it my­self. So, I waited till I got mar­ried and slowly moved away (from the bro­ker),” said Anusha.

The cou­ple was also not keen to take on un­nec­es­sary loans. “Mar­riage, car, house… it’s a lot of debt,” she said. As of now, they do not plan to buy a car be­cause “it doesn’t make sense,” said Anusha. “I don’t par­tic­u­larly want to own a house,” said Shyam. But what they do want to do is be able to travel. For this, much of Anusha’s sav­ings, which were parked in sav­ings ac­counts, have been moved to liq­uid debt funds. “I needed bet­ter re­turns and liq­uid­ity so that I could travel,” she said.

Shyam, who had done a course in en­trepreneur­ship, wants to keep the money aside to pur­sue other cour­ses. “I now un­der­stand the long-term na­ture of mu­tual funds. I also learnt about liq­uid funds in­stead of fixed de­posits,” he said.

Anusha and Shyam have started on a strong foot­ing with a fi­nan­cial plan in place for most of their goals for now, and ac­cord­ing to their pref­er­ences. “I am risk-averse, and I want to be in a safe zone as much as pos­si­ble. (At the same time) there is a well-de­fined plan for Shyam to start his busi­ness,” said Anusha. Here’s to happy be­gin­nings.

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