Your ME3 (Money) — Expression, Experiments, Education

I recently gave a short talk on Personal Finance in my apartment complex. We had around 15–20 people attending the event. The audience profile was a spectrum ranging from my 8 year old niece to a senior professional in his mid-50s. We had the usual questions that you can expect from such a workshop, however I recall one query distinctly:

Puneeth a lawyer freshly out of college who came along with this father (the senior professional) said — “I want to invest in stock market, though my father tells me to avoid it. What do you think I should do?”

Indian Scene:

- Education system completely avoids teaching basic money skills in India.

- Parents rarely talk to their kids about managing money, about their own money struggles or success.

- Concept of part time work does not exist like in the developed economies, so we hardly get to handle money before our formal career starts.

This brings me to ME3 (Money) — Expression, Experiment & Educate

Money Expression: For different things in life, we all have a different expressions. Someone is more visual, someone loves music, some love sports. We all have a different way of expressing ourselves, and similarly we bring our diverse natures to personal money management.

This is not something that you find out just by taking a risk profiling test with a financial advisor. Rather this is something you also experience over a period of time. This question is as difficult to answer as ‘What brings us joy?’. This brings me to the next “E”

Money Experiments:

Investment Experiments: As the saying goes, there is no better teacher than experience. Youngsters have time in their hands, and their savings will only grow over the coming years. Therefore, they should experiment early on. Try out different types of investments — fixed deposits, equities, mutual funds. In the later stages of life they’ll already know how things work.

Budgeting Experiments: They should also try different type of budgeting experiments — not just to save money, but to also maximize happiness. See which spend gave them more lasting joy, and build a framework for the same over time. You may find that holidaying with friends is more fun than going out on a weekend, and you may optimize your spending habits to meet that.

It is good to seek mentors, form groups with friends, read some of the classical books. You do not want to experiment and come out with wrong lessons, at the end of it.

Money Education: Globally the financial literacy campaign is moving towards a more holistic approach. The idea is to actually work on ideas that do not just educate, but also empower and change behavior towards money. The most important step that we can take is to talk more freely with our families about our money. There should also be a day in a year spent on discussing money, just like we plan family holidays.

As a family, take the National Financial Literacy Assessment Test or the Financial Literacy Quiz

To answer Puneeth’s question, I would say — “Finding your money expression is very important. as your behavior subconsciously controls many of your decisions. You can effectively optimize that for both good returns and lasting happiness through experiments (when you are young and can afford to) and finally make financial education a family affair. :)

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