When in­de­pen­dence truly matters

It is im­por­tant to get one’s fi­nances in or­der first

The Times of India (Mumbai edition) - - TIMES PERSONAL FINANCE - Uma Shashikant

My 32-year old niece has just one re­quest: she does not want to be pestered to get mar­ried. As a good look­ing, stylish, well-earn­ing girl from a good fam­ily, her mother sees her as more than el­i­gi­ble. As an in­de­pen­dent woman, my niece sees no point in mar­riage.

In the good old days, a woman needed a man for many rea­sons, she says. For some it was sta­tus, or fi­nan­cial se­cu­rity; or pro­tec­tion from other pry­ing eyes. My niece ar­gues that none of those rea­sons hold good now and that is too high a price for a few years of le­git­i­mate sex. There are enough chil­dren al­ready to care for, why bring more into the world?

It is lib­er­at­ing to see that girls are stand­ing up for their be­liefs and de­fy­ing so­cial norms. But what about set­tling down, the fa­ther asks. Let’s put the fi­nances in or­der, she replies and asks for a list.

First, my niece should move into her own space. She should ex­pe­ri­ence first hand what it is like to be on her own and take re­spon­si­bil­ity for in­de­pen­dent liv­ing. Sec­ond, she should al­lo­cate her money into clear buck­ets of manda­tory ex­penses, dis­cre­tionary ex­penses and sav­ings. She should be able to fit her manda­tory ex­penses in less than half her in­come. Third, what is the pat­tern of her dis­cre­tionary spend­ing? How much does she spend on shop­ping, etc? Do the fun ex­penses fit into her in­come? Fourth, is she sav­ing at least 20% of her in­come? Al­ready in her thir­ties, what if she faces the risk of a job change? Sav­ing habit and the se­cu­rity of fi­nan­cial as­sets would be res­cue. Fifth, does she have a money phi­los­o­phy? Without well thought out frame, she will find her money life drift­ing aim­lessly. Sixth, how well is she cov­ered for emer­gen­cies? Does she have ad­e­quate med­i­cal cover? What if her par­ents took ill? Sev­enth, how in­de­pen­dent is she with her fi­nan­cial de­ci­sions? Does she know how to in­vest, do the pa­per­work, trans­act with ser­vice providers, etc?

My niece is un­fazed by all this. She is con­fi­dent that she will stay in this job or find an­other one if need be. She likes the idea of liv­ing by her­self and sees no need to own a house or a car. She is will­ing to make a bud­get, track her ex­penses and con­tinue sav­ing. While the world of fi­nance and in­vest­ing is new to her as her fa­ther has al­ways man­aged it for her, she thinks that with lit­tle ef­fort she will be able to fig­ure it out. She wants to weave an an­nual va­ca­tion with her par­ents in her plans. She tells them there would no nag­ging hus­band or in laws to re­strict her in­volve­ment with them. What about the mid­dle age, her mother asks. There will al­ways be friends, the peo­ple who have been with us long enough.

There is no point ar­gu­ing with her, we sur­mise. She prom­ises to take charge of her fi­nances and is con­fi­dent of do­ing well. What about the ro­man­tic no­tions of re­turn­ing to find love at home? She says she has traded it off for the joys of the big and beau­ti­ful world. The au­thor is Chair­per­son of The Cen­tre for In­vest­ment Ed­u­ca­tion and Learn­ing

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