Time for our first savings update, we had been trying to be more efficient for a few months now but it was to complicated too calculate for many reasons. As a result, its only in September that we are able to properly do it. One important rider, we weren’t super frugal, we still ate our and rented car for trips.
We both have different payout dates, so I am trying to align our incomes in the same pay period and share the final percentages.
As both are incomes are different and Mrs A is part-time at the moment, and thus when we do an actual calculation, we get to the below:
The month was an exception and I think our savings rate will average between 30-33% for an year.
So hang on for the next savings update. Next time I’d also share successes and mistakes of that month.
While we are on the topic of my relationship with money, I would kick start the series of My Money Mistakes and make it an annual edition. The year is yet to close, but I think I have already done the worst ones.
Each year I make stupid money mistakes, which I mentally tag into my stupid mistakes bucket. Small bad purchases or misses which result in this are allocated, and try not to beat myself over them. My Money Mistakes is not about those accidental events, but of seemingly deliberate stupid decisions I have made, and will make with money.
This year, I have two really good candidates,
Trip to India, to attend a destination wedding and never getting to meet my own immediate family. We planned months ahead, got tickets for the three of us, survived 13 hours of flights (and a bomb scare at the airport) with a toddler to attend a wedding and meet old friends for 10 days. We did take a few days off after the wedding to stay in a resort and enjoy Goa (look it up, nice place). Yet, if I add up the tickets+gifts+wedding wear+hassle we had to go through, the trip was just not worth it.
Apart from a damage of over 3000 euros, we got sucked into showing off our well being (the indian way). We did enjoy meeting some family members and friends, but this could have been done differently at another time. Never again.
Investing in Cannabis stocks. You can already see where this is going, I bought into CGC and AC stocks, both of them tanked horribly. I had a stop loss and luckily only experimented with 300 bucks, but even with that a loss of 21% in value hurts. Clearly I was high without learning the specifics. Will-not-repeat. (Side Note: On the other had I sold off Shopify which I never trusted and still made a profit, it is still going upwards but I don’t buy it.)
Would you like to share a mistake you made with money in the past year? Maybe we learn from it
The reason behind sharing this personal story is to decode my relationship with money, this post also puts out into public the story of family’s struggles over the years.
As mentioned in About Me, I am from India, my parents continue to live in India. Born into a relatively wealthy family, my father opted out of their business and went on to work in a government owned technology company. He did well for the first two decades or so, managed to build himself a house and grow in the organization. My parents were always cautious in spending and these values passed on to us.
Strike 1: Depletion of Investments and Faith
India had to opt for various reforms in early 90s, which opened up its markets to global investors. In 1992, the BSE Sensex grew from 2000 points in January to over 4467 points in April. This was a massive bull-run, fueled by stock price manipulation orchestrated by Harsad Mehta. On April 28, 1992, the market crashed by 12% wiping off billions of investments.
This single event resulted in losses for my father, as a result of it, he never spent a single dime towards market investments. The faith on market forces was broke, and remains to be so. He missed on the growth options available.
Strike 2: Surviving on partial pay for almost a decade changed the relationship with money
As a result of economic reforms, state owned companies started facing massive competition from new entrants, their inefficiencies/mis-management laid bare and my fathers employer ended up being a loss making firm. The direct impact of this was overdue salary payments, take-it-or-leave it early retirement options became the only choices.
Multiple years of partial pay meant we struggled managing our lives, and were extra frugal for many years. The unpaid income is lost, and has never been paid. He finally opted out with an early retirement. Switched careers in mid-50s to become a professor and lasted another decade. This helped him build a little corpus and helped his confidence.
The topic of money was not openly (and still is) discussed, we had no real financial education except for being frugal. I believe that there was a sense of shame for them, for they actively tried to hide their situation with their friends or family.
I still remember an argument between my parents when my father had to pay extra 300 INR (5 EURs) for an AC train ticket for me. This was because I was to accompany a cousin who could afford to travel in AC. It was one of the few times when the strain was laid bare.
The other event which I remember is when I was about to start my first job, and he wanted me to take a flight the first time. To support this, he took a personal loan and give me a little bit of money for the first month. He simply had no savings to help me out then, but he was proud of me. I am happy to add that it was the last time I asked him for money during my working life.
So, my relationship with money?
Save. Save. Save. Be frugal and careful on how you spend money. The result is that whenever my monthly account goes below 10% of a month’s pay, I feel stressed.
Do not invest. The market is rigged. It has resulted in me avoiding the market, and even when I started the invested amounts were minimal. It is only in my 30s that I understood my mistake and have tried to fix it.
Security over risk. I am pretty risk averse, be it investing or career. This remains to be a barrier, and I believe being FI will allow me to take those chances.
Don’t talk Money. We don’t speak money with each other. This has lead to a situation where they think I do not earn well enough because I am frugal!
Do you have any stories to share about how your relationship with money was shaped?