Published Article Details

How to take charge of your finances in tough circumstances

Posted by: Uma Shashikant on Feb 19, 2018, 06.30 AM IST

Sevanthi has just returned from work. She will pack lunch for her husband and children and go to sleep. Working all night and sleeping in the morning is something she has done all her life. Sevanthi is a sex worker, married to an HIV positive man, but they have an HIV-negative child for whom they both want to do their best.

Life is tough, to say the least. But they are very keen to understand the world of finance and investments, so they can secure the future of their child. When viewed from a typical financial planning framework, the risks in their situation come to the fore. We agree to talk through and find some solutions. The income of the family is very unstable. Her husband does not have a stable job. Despite all assurances to the contrary, his HIV status gets disclosed to his employers. He tells me how callous people are about pointing fingers, or revealing the information in public, or letting reference checkers know. He is a graduate, but was disowned and thrown out of the family when his HIVpositive status became known.

Agencies that work with AIDS patients provide medication, counselling and help victims interact with and help one another. But they are not equipped to find jobs or counsel employers about the need to be discreet about the condition, or impose the legal position that such discrimination is unlawful. Sevanthi is the stable income earner and the couple accept the vagaries of her position with courage. However, the income barely covers their rent and essentials. There are times when she falls ill, or is too weak to work. They do not have a bank account, or any assets.

The first principle in financial planning is to ensure steady and stable income that provides for essentials. It is when it generates a surplus that savings and investments can begin. They do not have capital for any trade or business and typically see work as something that involves long and hard hours of physical labour. When they do manage some surplus, they tend to use it to provide some entertainment to their child. They take the child out for a good meal, a ride in an auto, a movie, a small toy, or new clothes, depend ing on how much they have. To deny these small pleasures is to return to the drudgery and tragic circumstances of their lives. The moments of laughter and enjoyment in a public place, which gives them a sense of being normal, is precious.

How can Sevanthi achieve her financial goals? She does not want charity and is unwilling to reveal her identity to the outside world. Her husband though is confident of finding a way out of his current predicament over time.

First, whatever the situation of the household, two incomes is an advantage. Sevanthi should define the expenses of the family within that context. She should think through her expenses from the angle of her income alone. She spoke about saving on rent by moving to another location; her husband identified savings in phone and electricity bills; they both agreed that they can make eating out a once weekly rather than twice weekly affair. These are difficult measures, but if they prioritised the child, a few choices of today’s entertainment could be traded for future security. Those few hundred rupees will matter.

Second, her husband agreed that he would focus on a job, any job, rather than be specific about the kind of jobs he can do. Sevanthi knows swinging between being desperate for anything and being picky about what kind of work is acceptable is not a good idea. The couple fight on this issue too often. Her husband agreed to look at his work as something that brings money for the child’s future. Not the burden of the household or the expenses, but working for the child and their future. He began to discount many of his needs about a workplace and saw them as trivial.

Third, they should formalise their household’s identity and take advantage of government schemes for saving, insurance and subsidies. There is no hiding and living like non entities. They had to complete paperwork at their healthcare centre to avail of medication and counselling. They only had to extend it to open a bank account and to be aware of welfare schemes. They agreed to step up and take advantage of whatever facilities came with government programmes.

Fourth, they had to learn to not touch the money that gets accumulated. There is no financial planning without the emotional intelligence of having the money but not using it. Instant gratification is the enemy of long term goals. They do not have anyone who would mentor or hold their hands, but whether they will save would be the true test of how strongly they feel about the financial future of their child.

Fifth, they would incorporate responsibility for their health into their lives, more strongly than before. It is easy to skip medication when the going is tough. A tough disease can leave one drained with no motivation. They will visit their centre and counsellor regularly to keep track of their medication and progress. They will take help to stay on track with their health.

Sixth, they should begin to invest when they have found the ability to generate income, to cut expenses, to ensure a surplus is generated and saved, to keep that saving aside, to hold back from accessing and using the savings, and to keep the income generating capability as intact as possible.

All these steps are challenges for them, but if they are serious about their goals, they would do it. Their circumstances are tough; Their goal is lofty and big when viewed from where they now stand; and their savings could look too small to matter. But by keeping at it, and being motivated by their progress, they will go far. It is not what others do that should drive our decisions; it is our ability to do better than what we did in the past that makes a difference. Sevanthi is not the one to sit in a corner and hope the world would help her, she has decided to take charge.

The author is Chairperson, Centre for Investment Education and Learning.
Disclaimer: The facts and opinions written in this column are those of the author and do not reflect the views of

This article appeared in Economic Times dated Feb 19, 2018, 06.30 AM IST

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