Arti Tibrewala Darooka
A chartered accountant and MBA, Aarti is an entrepreneur and financial literacy advocate. She has over 15 years of combined experience in the consulting, advisory and travel industries. A national ranker in CA, Aarti is a published author, who has written a plethora of books for children’s financial education and is currently helping build awareness for financial literacy for women through her platform, Sthreedhan.
Ayushi is an MBA-graduate. She did her masters right after her graduation from a tier-II MBA college and is now working at her first job. The pay is par for the course for freshers like her, but she’s reasonably well for a young woman like her. She comes from a middle-class family where both her parents have worked throughout their adult lives and expect her to do so as well. Her father is a senior manager with a public sector bank and her mother is an accountant with a multinational company. Ayushi has no siblings.
Ayushi’s friends are all in a similar position to her – post-graduates with fresher jobs. Some of them come from more affluent families while others come from a working-class background like herself. Although their backgrounds are different, their interests are naturally similar and therefore, the reason they bond.
Ayushi’s friends are all planning to go to Abu Dhabi for the concert of their favourite international band. The ticket is not so expensive, but put together with the skyrocketing cost of travel and hotel stay along with other expenses, the entire trip cost would be about two months’ salary for most of them. This does not pose a problem for those who do not need to contribute to their household expenses or those for whom the work experience is more important than the money. However, for some like Ayushi, spending two months’ salary at the beginning of her career on a concert is unimaginable. Yet, the fear of missing out (FOMO) is so great, that Ayushi is spending sleepless nights thinking about the same.
At the same time, Ayushi’s mother, Preeti, has a wedding coming up in her brother’s family. She is concerned that she will have to give an expensive gift to her sister-in-law’s daughter at her wedding and is not sure how to arrive at the correct value. At the same time, she may need to buy an expensive saree for herself and ensure that the clothes her husband and daughter are wearing are also in line with social expectations. The value of the gift, as per the discussions she has had with other female relatives, needs to be what would be two months’ salary for her as well. Add to that the expenses of clothing for the three of them, that’s another month’s salary. Preeti is faced with a similar dilemma as her daughter – what to do and how to arrive at that decision without feeling terrible about it!
Preeti calls for a family meeting to discuss both their dilemmas. After all, spending so much money at one go would mean struggling for monthly cash flow for 3 months between the three of them. Although they do have savings, they are smart enough to know that touching their hard-earned, well-managed savings for these things would not be wise and the lack of discipline would dent their retirement funds badly. At the end of the day, they are all in salaried jobs and their investments are their only other source of income. If they touch those investments, they will not have a fallback after retirement.
Preeti’s husband feels that Ayushi should avoid going to the concert. Firstly, he feels that the reason for the trip is not justified and the cost of this trip is unnecessarily inflated due to the concert. He reasons that the same band has announced their desire to perform in India the following year and the chances are pretty high that Ayushi will get her opportunity to witness them live soon enough. He also explains to her that since she is paying off the loan that was taken for her MBA along with her parents, she does not have the luxury of making a rash decision like this. Ayushi needs to take adequate responsibility at this stage and not give into peer pressure.
For Preeti’s dilemma, Ayushi has a solution. She tells her mother about clothing rental services that have sprung up all over the city. These places have beautiful, expensive garments in perfect condition available on rent at a fraction of the cost that it would need to buy the same. She tells her mother that the outfits all of them want to wear would in any case be rare usage since they’re heavy and would not justify the cost. Instead of spending tens of thousands on buying each outfit, they can rent the outfits of their choice for a few thousands and return them with minimal effort. She also offers to go with her mother that day to check out a few places. The suggestion puts Preeti’s mind at rest, although she is a little skeptical since she hasn’t done it before. As a nature-lover, it also makes Preeti feel good about not wasting garments that would be hardly worn and re-using something that is already available.
As to the gift to be given, Preeti’s husband suggests that while it is important to maintain social standards, one must be reasonable in their expectations as well. They could give the bride and groom cash instead of buying them some silver item that would be of no use to them and make the amount in line with their own capacity rather than social expectations. Times are changing and people are becoming more and more practical. One should not ruin their own lives trying to meet other’s benchmarks. After all, at the end of the day, only they are responsible for their livelihoods. These relatives will not be able to help them after retirement. Even if one can afford a certain kind of lifestyle, life is not predictable and, one should hope for the best but prepared for the worst!
As author Dave Ramsey once said, “You must gain control over your money or the lack of it will forever control you.”