A few years ago, FIRE (Financial Independence, Retire Early) was everywhere on LinkedIn and IG. Every fin-influencer would talk about it. I don’t know if it still the norm. But the underlying question is very simple. How much of your life do you actually need to fund vs how much have you decided to fund by default?
Money psychology isn’t universal. It’s shaped by how and what we have lived through through our childhood. Mostly through scarcity, excess, a parent’s anxiety, a childhood that taught you either to save or to spend. So when I read a post like the one going around in the X. A man in Gurgaon, ₹26L a year, ₹15,000 left at the end of the month. My first instinct isn’t to judge the number rather than on the behavior. I don’t know. I am heavily influenced by Morgan Housel on this one. Few things to stress on.
Lifestyle has to be a conversation: Every couple has a spendthrift and a saver in some proportion. TBH, gifted if you could get one in your desired way. But, neither is wrong by default. But if that was never discussed and if one partner is optimizing and the other is drifting, then it will be a total chaos. the math would eventually break and the math game would turn into blame game.
Maximizers vs. satisficers: A distinction I keep coming back to link to my old post. One always wants the best available option and the other wants an option that’s good enough and moves on. It is quite important and maybe worth spending time on identify the areas of maximum and minimum.
Morgan’s line: No matter what you earn, maintaining the lifestyle is what costs you. Income solves today’s number/problems and creates tomorrow’s ceiling. The ₹26L earner isn’t broke because he earns too little. Maybe among the top 5% earners in Indian population? He’s stretched because rent, a car EMI, and ₹50,000/month for one child were never weighed against what the household could actually absorb/handle.
Some of those could be reduced. A family of three has room to renegotiate rent, groceries, even school costs and toys. None of it is fixed the way it’s posted across.
And if the answer is my wife should also earn. It is fair enough in this economy and with rate of inflation, but that has to be a conversation. Women re-entering workforce after a maternity gap is not that easy. The hurdles between the kid, job, household has to be managed. Very few get the resources and the additional support.
None of this erases uncertainty or unforecasted events. Health issues, jobs disappear, rent rises. But blaming a partner (irrespective of the gender) for the shortfall rarely fixes the shortfall.
Cutting expenses does. Saving as a habit does. Constant lifestyle does.
Cheers!
PS: Haven’t installed IG yet
Check out the previous post: Delayed Gratification!
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