Opinion | Let Deepavali be the hard deadline for your money box reset
For those with a financial plan, Diwali is a good time to clean the money box of clutter
Notice that when there is an external date marker, we end up doing things to service that date. Take birthdays, anniversaries, exams and deadlines around work. Exam and work related deadlines specially see us working at all hours with a single focus—of cracking that exam or shipping that order. We do the same when there is a deadline around filing taxes or making tax-saving investments. But most other items on our must-do list, like a health check-up, regular work out and money management, keep getting bumped to the next week, month or year. I’ll do it when I have, fill in the words ‘time’, ‘mindspace’, ‘money’ in the space, and we have our reasons in place for postponing one more time things we know we need to do but don’t since there is no hard deadline.
There are good reasons to make Deepavali a hard deadline for your money box. For those without a plan in place—you are the people still asking the question on what to buy this festive season: stocks or gold—it is time to begin the process. The question itself shows the lack of a money box in your life. Anybody with a plan does not ask such questions. Deepavali marks the end of the financial year for those who follow the Vikram Samvat calendar. It is akin to the 31 March financial year end. The next day is a new financial year and a possible new money beginning. This is a good time to begin the creation of your money box—or that virtual image of a box that has a financial plan in place. If you don’t have a money box, promise yourself that by next Deepavali this will be done. Inside this money box will go a robust cash flow system, emergency funds, life and medical covers, investments segregated by the length of the goal, a retirement plan and an estate plan. A money box takes time to set up, so give yourself a full year. But make this a hard deadline by involving your family. Put in place markers to pace yourself. Either use festivals or birthdays or a fixed date every month to accomplish goals. By this date I have created my cash flow system. By new year I have my emergency fund in place, by the child’s birthday I have my insurances in place, and so on. Get your children to put in celebrations to meeting a deadline—they will never let you forget. A dinner out, a small weekend getaway, a new gadget—decide what works for you and then celebrate each step of the way to a money box.
For those with a financial plan in place, Deepavali is a good time to clean the money box of clutter. We clean our homes to welcome goddess of wealth Lakshmi into our homes. Extend the thought and use this day as a deadline to finish cleaning your money box. Our lives are dynamic with each year seeing many changes in our personal situations. A marriage, a new job, a baby, a divorce, a new house, a death, sale of a house, a promotion, a job loss, children moving to higher studies, children getting independent, children getting married—the list is long. Most life events will need a tweak in your money box. Sometimes things beyond your life change that need a change in your money box. Tax rules change. Or a regulator will change rules that need you to rethink the products in your box. Over the year clutter begins to build in the money box and that needs to get sorted before it overwhelms. Use this deadline to finish your internal audit by Deepavali each year so that by the time goddess Lakshmi walks around looking for a clean home, your shiny money box shines like a diya with asli ghee!
Family rituals are important. They are the anchors around which memories are created. The Deepavali home cleaning, the new clothes, the gifts and gadgets, the parties, the pooja and the crackers are all a part of this annual event. Add one more to this list of getting your financial life in order and then maintaining it year after year.
Monika Halan is consulting editor at Mint and writes on household finance, policy and regulation
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