First it was a blog on Wordpress. Then came the reels on Instagram. Chennai-based chartered accountant Lavanya Mohan has taken many routes to break down money matters into simple, easy-to-understand and relatable terms. As her followers grew, so did her content. Lavanya says, “Money is not math but a language that has its own vocabulary and grammar.” After making finances more approachable and presenting it as a tool for empowerment, she is now coming out with a book titled, Money Doesn’t Grow on Trees: The Friendliest Guide to Personal Finances (Simon & Schuster India; 299).
The book guides every individual on age-appropriate financial decisions — suggesting that responsibilities may change, but when you have financial backing throughout, navigating those shifts becomes manageable. Lavanya, in a conversation with CE, shares her learnings, experiences and advices from her financial journey and beyond.
Excerpts follow:
How did your early experiences shape your understanding of money and how has it evolved over the years?
I grew up in a household where money was discussed fairly often and openly. My father is a chartered accountant and so am I. When we were young, he’d keep driving this whole point about needing to save, needing to invest. He’d always encourage us to go forth and invest. So, I did not know until much later, that most households did not discuss money with the aggression that my household did. My mother, I remember, always used to tell me that “you have to own your own money”. So we were also driven to like work early on and I think all of that really helped shape my relationship with money.
As I grew older, that aggression with which I chased money as a young person mellowed down. Now, I do look at value more than the actual number itself. It’s healthier now.
Did these personal experiences make you pen down this book?
Absolutely. I realised that a lot of extremely smart women were struggling with finances or they would say, I’ll let my brother/dad/boyfriend/husband handle it versus them taking money in their control. I found it very surprising. More women should take part in investment decisions. They should know what’s going on with their money. So, I wanted to create something that would help people, both young and old, to not feel overwhelmed at the thought of taking control of their finances, because there’s so much material outside right now. The Internet is very overwhelming, and is putting off a lot of people from picking this up. That was a key factor that encouraged me to write this book.
Talking about how women don’t take financial roles in a family, do you think the current generation is also like that or do you see a shift?
There is definitely a shift, and it’s a positive one. Thanks to the Internet and to finance influencers. Whether or not I agree with their advice, what they have done is to normalise the talk of money. The young people in this generation are more aware of health insurance than they were ever before. They’re more aware of SIPs, mutual funds. There’s also been a lot of push from the government in terms of making mutual funds more prevalent and more popular. So, I definitely think that this generation is far better equipped in terms of understanding money than the previous generation.
In the book, you have mentioned, we have not been taught about finances at school level. So what do you think is the right age to introduce this subject to students?
I think 11, 12, is a great age. We can start introducing concepts like compounding. Another is delayed gratification where instead of spending the received money in two days, you just wait, save it, let it grow, and then spend it. Then you get to build the base for your college. And then by the time you’re in the workforce, you have a much clearer idea of what money is. So you’re not struggling the moment you get your first salary.
You know what you want to do.
According to you, when should an individual begin thinking about their savings, spending, and investing?
Saving and investing should come from your first job. Once you get into your first job, you build a habit of saving. I say ‘habit’ because what you need to get used to is money going out of your account every month. So that by the time your salary steps up, you can just keep adding to that little saving that happens every month. And because that habit has already been set up for you, you’ve already learned to live with a little less and you’re not figuring it out for the first time.
Setting up that savings habit is important once you start getting in your first pay cheque.
What about the unorganised sector or small scale vendors? How can they make better money choices?
The circumstances and the challenges that they’re dealing with are different from what you and I are dealing with. For them, there will be a lot more attention that needs to be paid to debt, especially, since they tend to borrow from unorganised lenders who actually end up charging ridiculous rates of interest. They are trapped for a long time.
Their education has to be formalising their incomes. From healthcare, government benefits, and their children’s education, to formalising their own finances, should be the focus over there.
What do you think are some of the common financial mistakes Indians make and a few tips on how they can avoid them?
As Indians, we are married to the older generation’s ideas of saving. For example, all of us grew up seeing our grandparents telling our parents to get insurance investment products. And back then, that was an available option. Today, there’s much more available in terms of more efficient investments, and better designed products that can help you beat inflation. So being stuck to insurance investment products can be avoided.
Secondly, we are very casual with debt. India has a debt problem no one wants to talk about. The number of credit card defaults has spiked debt to 40% of the GDP and all of us borrow thinking we will pay it back. But things can spiral a lot quicker than we think. Life is very unpredictable, and you get into debt, it’s very
concerning. So I think we need to be more careful around casual debt. I’m not talking about home loans or educational loans but getting an iPhone, going on holidays or
buying luxury products on EMI. That kind of spending needs to stop. Save first and then do your kharchas (spending).
In your view, what does it really mean to be financially independent?
Financial independence is when you have the ability to choose whatever it is that you want to do. (It can be) having enough money to walk out from a job, knowing fully well that for the next six months or one year, you don’t have to worry about money.You can put your head down, work on something on your own, take a break, or figure out whatever it is that you want to do — that is financial independence. When you know that you have the money that can back you up in that decision, then that’s financial independence.
What is your one-line money mantra?
Money doesn’t grow on trees is my money mantra.
Watch: https://youtu.be/KZ9ifBj3SIM