Diwali gift to oneself, a new deal with money
Dharma and kama both need the foundation of artha. Along with home cleaning this Diwali, put order into your money box and rework your relationship with money
We have a difficult relationship with money. Centuries of poverty due to colonisation limited the possibility of achieving wealth for an average Indian family. It firmly created the binary in our civilisational memory — the rich are bad and the poor are morally superior. This binary said that the poor are not rich because they don’t have ill-gotten wealth and the rich are rich because they are complicit in some crime. Asceticism was celebrated and the display of wealth frowned upon. The post-Independence socialist years hammered home the moral code that money is bad and profits are dirty. Even today the super rich like to call themselves as being people with “middle-class values”. But then along comes Diwali and the average money-eschewing, morally superior country turns to Lakshmi pooja with great enthusiasm. So then, what is our relationship with money? Is money good? Do we want it? Why are we so afraid to talk about it?
Diwali is a good time to talk to ourselves and clear our heads about this relationship. Money has a fundamental place in our lives. It is the oxygen of our material life. The four purusharthas (goals of mankind) have artha (wealth) as a fundamental goal to be achieved along with dharma (duty), kama (desire) and moksha (self-realisation). Money and wealth are central to the civilisational memory, but here we are where there is a taint around money and wealth.
Talking about money, other than in a disparaging, off-hand, I-don’t-really-care-about-it way, is seen as not being “cultured” because money and its pursuit is seen as crass. I find that behind the veil of culture and cool, the real reason for the disdain is fear. I find most people actually very worried, in debt, with a mess in their money lives and absolutely frozen into inaction when it comes to money and its management. I am constantly amazed to find that even 50-year olds have no organised way of documenting their basic financial details and each year is still a scramble at tax time for paperwork.
Reclaiming our relationship with money begins with a deep clean of our money box. It is best to begin with the paperwork. The goal is that we should be able to email or send a document over a messaging app in 30 seconds to the chartered accountant or lawyer or whoever needs to have that document from our phones. Working backwards, we need to set up a system that allows us to do this. Our goal is that by the time the tax-filing date approaches, our regular maintenance of tax details ensures that we spend hardly an hour working with the CA for the full tax return.
The document cleaning is not restricted to banks and assets, but also subscriptions and other digital payments you make. India paid upwards of $15-20 billion for services bought on Google, Meta, Apple and Microsoft. Add another few billion for OTT platform fees, and we actually see the US-India service trade deficit turn into a surplus in 2024. We need to check family subscriptions for duplicate accounts and auto debits that are not needed anymore. We should do the same for club memberships or gym subscriptions that are not being used.
Next, attack the clutter in our investments. We should close legacy bank accounts that are still hanging around due to oversight or even nostalgia. We need to either use it or close it. We need just three bank accounts to manage our income, spending and saving. The rest must be shut down. The same applies to credit cards, where we keep it down to a maximum of two. One back-up in case the first gets compromised. Remember that each relationship comes with usernames, passwords, KYC, and other updates that need time and attention. The KYC and password overwhelm is real. Reducing the relationships will help.
We need to remove the multiple pipelines that connect our money to products. People use many ways to buy financial products. Between agents, apps, platforms and brokers, the real split of assets between risky and non-risky gets muddled. We should reduce our financial relationships and move to a single pipeline for the same product. For example, there needs to be one agent or advisor or platform for all our mutual fund transactions. And one brokerage for all the stock-market-related transactions, if any.
The toughest call is to streamline the real estate portfolio. Multiple properties just add complexity to our life. Their maintenance, taxes, utilities, society fees and security is a time and energy quagmire. One roof over our head and the rest in financial assets is a hands-free way to manage our financial life. Money should hum quietly and neatly in the background and not take up chunks of our day in managing it.
Lastly, we need to lose the desire this Diwali, as we pray to the goddess of wealth, to harvest the highest return on our investments. Nobody wins all the time. If the return is inflation- and tax-positive over the long term, the money is doing fine. The desire to make a killing by timing the market is a sure way to take home big losses. Trying to time markets also freezes us into inaction. Who is to say that gold has reached its peak, or not right now?
This Diwali, we should give ourselves and our family the gift of order — order in our money box that will not just declutter finances but will most certainly build stability and happiness. A new relationship with money will mean accepting its importance in our lives and then doing the work to set up a clean, efficient, and simple money system. Money is good. How we earn it and how we spend it might have moral connotations, but money in itself is good. After all, dharma and kama both need artha as the foundation.
Monika Halan is the best-selling author of the Let’s Talk series of books on money. The views expressed are personal
