Your Money: Money management tips from the festival of Holi


By Rina Nathani

Many of us will be enjoying the festival of Holi this year after a hiatus of two years due to the pandemic-induced lockdowns and restrictions. As we let our hair down, let us also learn some key financial lessons from this festival of colours.

Playing safe (Investing sensibly)Just as you take precautions by choosing organic colours to protect your skin and hair while playing Holi, following a sensible approach is a must in managing your hard-earned money. When investing, consider your age, personal risk profile, broader investment objective, the financial goals you are addressing, and the time in hand to achieve them. A need-based and focused approach will prove to be in the interest of your (financial) well-being, and like Holi, investing too can be a fun and rewarding experience.

Vibrant colours (Importance of diversification)When it comes to your investments, you need to diversify across various asset classes: equity, debt, gold, etc., so that it adds vitality to your portfolio. Diversification is one of the basic tenets of investing that helps mitigate the risk of loss from investing in any one single asset class, optimises risk-adjusted returns, and enhances the liquidity of your investment portfolio.

Savouring sweets (Accomplish your financial goals)Along with the colours, we also enjoy the delectable Gujiya, PuranPoli, etc., during the festival. Similarly, when it comes to your investments, you need to work hard to save a meaningful sum, invest it in productive investment avenues diligently, and be patient enough with your investment (give it enough time to grow) so that it turns out to be a fruitful experience and you accomplish the envisioned financial goals. The sooner you start your investment journey, by giving enough time to the power of compounding to work its magic, you would be able to achieve many of these goals comfortably.

Bonfire (Paring debt)Debt is not bad as long as it is within a manageable limit. The equated monthly instalments on all your loans should not exceed 35-40% of your monthly net take home pay. Pay your outstanding loans and utility bills diligently on time so they do not affect your credit score.If you have any debts, this Holi, take a vow to shed your debt before the holy fire of Holika.

The writer is chief business officer, Quantum Mutual Fund