Money Stuff Part 1

In our world, money is something that has become essential to buy things and live life.

A lot of us work for hours and hours every day, every week. We get paid very little or maybe a lot.

And then after this, many of us don’t think much about money. Very few people talk about savings, investments, money.

Everyone’s talking about physical fitness and physical health, mental health, career stuff. I have rarely seen people talk about money.

So, in this series of posts, I want to talk about money from my perspective. I’m an Indian. I’m from what’s called a middle class family, meaning a family that’s not rich per se. But I guess a lot of people are in the middle class. Maybe my Dad earned a little too much sometimes I guess, so I’m not sure at what spectrum of middle class.

Anyways, now, I have been working for 3 years now, since 2017 December till date, the post’s date, which is March 2021.

Let me tell you how I have been spending my money, what I have been doing with my money, and what happened in the start of this year in 2021, which kind of seems like a big turn of events if I want to put it dramatically.

Now, if I go back to 2017, I got a good job with a salary of around 7.5 Lakhs CTC at my current company ThoughtWorks. I started work in 2017 December.

Before moving forward from 2017, I want to mention that I had earned a few bucks from freelancing in Fiverr and Upwork before joining ThoughtWorks. I worked day and night at times and did it for five months with lot of gaps in between and got around 35000 INR finally, actually it was in dollars, around 625 dollars in total. Today’s value of that money maybe more than 35000 INR, but I think that’s what I got at that time in 2017. Let’s dig a bit more deep into these before I get into the post 2017 work time of mine.

After freelancing for 5 months and then getting into ThoughtWorks and getting paid around 40000 INR to 45000 INR per month, I kind of got to know that earning in freelancing was no easy game. Why? because it took me 5 months to earn 35000.

But I guess it makes sense. It’s not easy for multiple reasons. For example, especially when I was working at 5 dollars an hour. Sometimes for more hours but only for 5 dollars. This was on Fiverr, where it’s common to have 5 dollar gigs and many other multiples of five. Just a nice touch to the whole “five"rr I guess.

So yeah, I didn’t exactly know how to price the gig I was working for. But I didn’t know much about work, work value at the time. I still don’t know much. I guess I find it hard to price things, price work, price products etc. I have heard that pricing is a tricky thing in products, but yeah, I guess it’s good to know your work value. I just understand work value by looking at what companies do and charge clients.

Anyways, about freelancing, I was actually surprised that I was getting any gigs at all. I usually imagined that getting gigs is a big thing. I mean, Fiverr is a big platform. With lot of people providing lot of services, and lot of them buying those services too.

Fiverr actually had two ways for a connection to a client. One is, client approaches you based on the gigs you have put up on your profile. Another is something called as buyer requests where clients put their requests and then freelancers send a quote for the job.

I think I probably sent tons of requests. Only some of them converted to actual jobs. Sometimes I got requests for my posted gigs.

Most of the clients were from outside India. I think they clearly took advantage of the fact that I’m an Indian - it shows on my Fiverr profile and that I’m a new freelancer, again it is shown on my profile on how many gigs I have done. They had a conversation with me and understood I’m a kid who doesn’t know much and is just starting off. Given the usual notion that people in India can be paid less, they did exactly that. I got paid less. What did I get in return? At that point, the only thing I could think of was - I got paid! Versus simply sitting at home not doing anything and not getting paid. I was at home unemployed for many months after my college was over as ThoughtWorks decided to call me and my batch only in December 2017, though the promised date of joining was July 2017. We were told that there were no projects at the time and that we wouldn’t have work to do. So, I guess they didn’t wanna pay us while we joined and simply sat in the office, because that would be a loss for the company, so they decided to call us later as that’s only a loss for the students who will stay at home for months not joining the company or getting any experience. Sometimes it annoys me but I guess it’s okay, I mean, I at least had a job. But yeah, my college was over in around May 2017. So, that’s a lot of months - May to December. 7 months, not counting December when I joined.

So yeah, I was happy that I was getting paid in my Fiverr gigs, and I had also learned about Upwork and joined it and got some gigs over there. Most of the gigs in both the platforms were repeat customers who were willing to pay the same amount of money again and again, even though most of the work was a repeat and anyone could have done it and they knew it too. So yeah, I got paid, I got some basic novice experience in the freelancing world, and got paid too. Surely sometimes it was frustrating that I was getting paid low. But there were some good spikes in some projects where I got paid a lot on a hourly basis for a lot of hours.

I actually had registered on Fiverr long ago but got the confidence to try it out only later. I simply put in more effort, tried to think about the gigs I could offer and finally did it. Same for Upwork. I learned skills when I couldn’t get the job done. One of the jobs, it took me hours, like around a day to get the thing because I didn’t know how to work with Wordpress and Wordpress plugins and how to use a REST API Client from a Wordpress plugin. It was apparently an easy task as Wordpress had it’s own custom defined functions which worked unlike some of the PHP code I had copy pasted which was more generic and not specific to Wordpress and didn’t work at the time.

Anyways, I did all this and got paid. Understood that sometimes I was gaining some money versus no money, and some experience versus no experience, even though my clients were probably getting a lot of profit by getting work done through my gigs. If only I lived in a different country, a country with a higher cost of living, I might have eventually asked for more bucks I guess, I don’t know. Anyways. Also, whenever college kids ask me about freelancing, I tell them all this stuff - where many clients are probably using them, for a very low cost, and that it’s up to them to take the gig or not, but that they should be aware of this.

Now, going to December 2017, I started attending training sessions for a month. I was getting a lot of allowances for food everyday. Me and my room mate tried to save the money from the allowance as much as possible but sometimes paid for outside food lavishly. We however had to order food as we were out of our home and staying in hotels. This went on for a month. I started handling my money by noting down my expenses in an excel sheet! I’m pretty proud of my younger self, lol. Just in this case, I did make a ton of mistakes though. :P

Next it was January - February 2018, I was again attending training sessions in another place and again I maintained my expenses in Excel and also ordered a phone for myself finally for around 14000 INR. Prior to this I was living under the rock mostly using a simple non-smart phone and nice big Amazon Kindle tablet that my cousin gifted me. It was a simple and good tablet, not a very costly one. Simple priced one. I actually had another tablet before this one, which got stolen

After this I joined the company and started working. In the months I was working, I never worried much about money. I was lavishly giving away money for a lot of things. But it wasn’t way too much. I was careful about that. But I surely didn’t think much about spending habits, investments. At some point I think I got the walnut app during my training and automatically tracked my expenses. This went on for a lot of months.

I started paying my taxes, filing tax returns. I still don’t know how it all works, but I have done it around 2 or 3 times now, all by myself, lol. And not Income Tax office has called me to ask why I didn’t pay my tax, so I guess I’m paying it alright :P :) Apparently for a lot of my friends, their dads, older brothers or others do it for them. I’m usually not one for “getting help”. I always try to be on my own, no matter what and try to thrive on my own. I do ask questions. I asked one of my seniors a lot of questions about tax returns, the process. He patiently answered my questions. He even told me that he usually puts a lot of his money in Public Provident Fund so that he can get some tax exemption. I decided to do that but was stuck by analysis paralysis so didn’t do it. 🙈 Anyways, this senior gave me and my friends a lot of gyaan! An interesting person, he worked in our company, that’s how I met him. But then he left the company after some time to do his master’s degree.

So yeah, I was on my own, getting paid, getting raises, getting 50000 INR per month, then 65000 INR, then around 70000 INR per month and finally around 85000 INR - 90000 INR per month. It mostly depends on how much is my salary, and any tax exemptions I used in the recent months which reduced my tax overall. But yeah, my salary kept increasing. I also noticed that my cost of living kind of increased, but didn’t increase too much. I ensured I could always live with less.

In all these three years, how have I been spending my money? I was spending on leisure (entertainment like Netflix etc), food, at some point started paying my portion of the rent in my house, paid for some of the expenses in our house. Well, because I live with my parents unlike many foreign countries that I hear about. I also pay for my education loan. This is the loan my Dad got for me for college because we couldn’t exactly afford that amount as a whole at that point. So, we got a loan, now I pay for the loan. I still pay for it, and it has been three years now. Apparently there are a lot more years for that loan amount to be completely paid. But the loan amount was only 4 lakhs. It’s funny how I earn more than that every year but yeah, I have to figure out how to pay for it to finish the loan payment along with interest as soon as possible but also not dipping too much into whatever I have.

I spent money for some day to day things too of course

At some point, I was wondering how much I earn and how much little I have in my account. I started getting my bank account statements for many months and was stunned at the amount of money I had spent. But I guess there were some luxurious things that I had paid for for my family, gold jewelry, trips outside India. Fortunately I’m not so much into luxury as I know it comes at a cost and I’m also not exactly interested in the tons of luxurious things people like. Surely I’m curious, I like to see it from far, maybe that’s it. I do like free luxury sometimes :P For example the so called free luxury like staying in company booked hotels. But in reality, it’s not really free. It’s kind of like the company paying you for your job. Nothing’s free. Remember that. Usually nothing’s free. Everything usually has some cost in some form if not money, usually there’s some transaction. Remember this famous quote from the Internet, if you are getting something for free, it’s possible that you are the product. Or maybe you are just getting paid / what belongs to you, in the fake name of “free”.

I also spent money from whatever allowance I got from my company. Internet bills, mobile bills, book buying policy, health and wellness policy. I think the book buying policy is probably the best thing that happened to me. Being such a lazy person and someone who tries to not spend money as much as possible, especially on things I’m not interested in. Books weren’t something I was interested in. I have so many books that I bought but are still not read. I did read some of them, and this year, in 2021, I got this book about money. I actually got two books. I’m yet to read the other one. Lol, I got these in December. It’s been three months now. Fortunately I kind of read a lot of the first book and I’m trying to implement it now, finally 🙈 So, this book’s called “Let’s Talk Money” by Monika Halan. The other book I still haven’t opened is called “Psychology of Money”. I highly recommend “Let’s Talk Money” book if you are from India. It talks specifically about the Indian context and investing in India. It talks about various problems when it comes to investing and how to tackle them. It’s mostly a simple book. Read it multiple times if you think it’s hard to understand. At some point, you will get the hang of it like anything else, once you put in constant effort in trying to understand money.

So, what are my current money struggles?

I have an education loan to pay. Funnily I don’t know much details about it - like when it ends, how much am I paying in total along with interest. I just know how much I need to pay monthly. That’s it

I’m trying to avoid spending money for luxurious things as much as possible. But the middle class family always wants more 😅 LCD TVs instead of the old TVs, extra AC for my work room for me - I really thought of not having it but given I have to work remote for a long time now, and my hot laptop, seems like a nice and very costly option. And then things like Vaccum cleaners. I guess these are kind of like basic necessities in one’s day now. I guess I might end up spending for these

I have to get rid of a LIC insurance policy that I got. It’s an endowment policy and based on the book that I’m reading “Let’s Talk Money”, endowment policies are useless. 🙈 They try to serve two purposes but fail at both from a consumer perspective. They try to provide benefit on death, which is too low compared to many other term plans. They also try to provide savings / investment on maturity, but the returns are too low there too, compared to other alternatives for savings / investment. I mean, I pay 28000 INR every year ( 4 quarter premium payments ) and if I do that for 21 years or so, I get double the money, and maybe a bit more. My Dad tells me that it can be less than double too!! Wow. So, that’s the return if I live up to 21 years. Apparently this return rate is very less compared to a simple standard fixed deposit. I’ll probably talk about this in another post in detail. In short, I should ideally be solving the problems my LIC policy solves in a different way. Some of the problems it tries to solve is - provide savings, provide a term plan, provide a tax savings plan. Ideally you can tackle each of those separately in an effective manner instead of giving away your money to LIC

I’m trying to understand medical cover and when to get it. I guess it might be too early to get one now. I’m 25. But I don’t know. I also need to get a term plan, but again, too early. I have no dependents who will suffer financially if I leave this world. But yeah, I do have a loan, for which someone has to pay. Apparently the idea is to have term plans with maturity amount equal to the sum of all your loans and EMIs so that if suddenly you leave this world, your family gets all that money from term plans to pay for all the loans and EMIs. Maybe I’ll write a post on this later.

I also have to figure out what to invest on. What are my short term and long term needs financially, by understanding what I want and what’s the cost of it. Funnily I don’t think I want anything per se. Maybe if I dig more, I might find something or check my family’s needs financially. But yeah, I surely wanna invest and play against inflation instead of letting all my money rot, even if I don’t have any needs per se. 😅

For investing, I need to understand different ways. With the book I’m reading, real estate, gold look like bad options. Mutual funds seem to be a good option. But of course it comes with risks. So I’m gonna check it out and then learn more and then invest

All in all, I’m also trying to understand more about money. Talking about money is a start :)