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In the old American movies that I saw growing up, girls always kept “Mad Money” handy. This was money a girl carried whenever she went out on a date in case she got mad and wanted to return home right away.

In our culture, the equivalent is probably the small ‘shagan’ money that married women get whenever they return to their marital home after a visit to their parents. Just a little something to indulge an impulsive purchase or a small treat or to even take care of an emergency without having to ask the husband or in-laws. The thought is sound, but the need today is to go beyond banking on parents or spouses for money to indulge. When we are in control of our money, should we not have the freedom to use it the way we want to?

Put a ring on it

All girls love diamonds, especially solitaires. I am no exception. On my engagement, I was looking forward to a nice rock for my ring finger. I got a beautiful, unique ring – a jewel-cut ruby surrounded by baguette-cut diamonds. I love it, but somewhere, the desire for a solitaire stayed By our third wedding anniversary, I had my solitaire – not as an anniversary present – but one that bought with my own money! It took me that much time to convince myself that it is all right to indulge and spend on what I want. I got the estimate to the price of the ring I wanted, saved for it and now I have my beautiful engagement ring on my left hand and my own empowerment ring on my right hand.

Who needs a man to buy us diamonds? Right girls? Diamonds are the metaphor here – your indulgence can be anything from a foreign holiday to a spa day to that shiny new car or those killer high heels. These are things that you could easily indulge in once you invested to get to them. 

Action Plan: Keep aside a small amount just for fun. It could be as little as five hundred or as much as you can spare. Fund your fun. For example : 

  1. Let’s assume you want to take that trip with your girlfriends 12 months from now and you know it will cost you ₹ 1.50,000, you need to start saving approx ₹ 12,000 every month from today in a liquid mutual fund that ensures liquidity and safety. 
  2. There could also be a situation or goal like mine, that you want to pay for 3 years later, similarly, you could work backwards and see how much you need to start saving and where. 
  3. Basis, helps you plug in your objective, duration and tells you how much you need to save and where

Freedom to do… or not to do

While buying diamonds with your money is truly an indulgence and there is nothing wrong in that; the true value of having money is the freedom it gives you. This freedom may be anything – the freedom to go in for higher education; the freedom to travel; freedom to do anything you want; and equally, the freedom to do nothing at all. If you plan your money well and invest it intelligently, you can enjoy the freedom to not work if you don’t want to.

After having worked without a break for a decade and a half, I took the decision to not work without even thinking twice. I had the freedom to do that because I had enough money in my PPF, the periodic NSCs I had invested in were starting to mature and the flat I had bought was earning me rent. So money not only lets you do what you want, but it also lets you not do what you don’t want.

Action Plan: A little bit of planning will let you live the life of your dreams – be it a foreign education or a dream to retire before 40. Identify your goal, and invest in it. Pick long-term investment instruments for long-term goals.

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