The unbearable heaviness of financial conversations

I have answered reader, viewer, and listener questions about money for a long time. I have seen them change over time. There used to be entry-level questions about what to do with ₹50,000 in the bank, what stocks and funds to buy, portfolio questions around asset allocation, strategy questions — a whole range of questions around the deployment of money. But as I complete a year of my audio-only podcast, some deeper questions are beginning to come — hesitatingly, with most asking for anonymity, but more steadily. These are around the family and finances, inheritances and the difficulty of money conversations between spouses, and the absolute myth of a big happy large Indian family. We might party together during festivals, but will also see each other in court the next day over the “Lajpat Nagar flat that papaji gave to bhaiyya and not me”.
The stress in families over finances begins to emerge at various life stages. It might begin post-marriage when different value systems, spending habits and lifestyle-related needs begin to present themselves as the couple moves from its first flush to fixing the leaking flush. I got a question from a listener who could not manage his wife’s lifestyle-related needs. She, it seems, wanted a life that he could simply not afford and was unwilling to cut back on spending to stay within the single-income home. This was a train headed for disaster that would end in either debt or divorce, possibly both.
While data is not available for middle-class India and its reasons for marital discord, data from the United States (US) points to money being one of the key causes of divorce. A study by the Institute for Divorce Financial Analysis (tinyurl.com/5h2eejaz) put money issues as the third biggest reason at 22% of why a marriage fails, coming after basic incompatibility at 43% and infidelity at 28%. It also says that basic incompatibility also subsumes the tensions around attitudes and values around money. Such stories can work both ways. I personally know of couples where the wife earns and the lifestyle needs of the husband keep her harnessed to the yoke.
The next stage is when adult children choose to stay at home with their parents. While large extended families living together are common in India, the new urban reality is mostly nuclear. But even in the cities, the option of living together is always there, especially as new asset creation for a young family is so difficult. Stress about money emerges around joint expenses and apportioning costs across the family. Purists sneer at any attempt to discuss these issues, but under the carpets in most three-seat-sofa living rooms, are stories of suppressed anger as one part of the family pulls harder. But judging by the increasing number of questions around this area to me, it is beginning to change. A good way to be fair, since young incomes are far smaller than those at the peak of their career, is to apportion joint spending on a pro-ratabasis. Each contributes according to her means rather than an equal share of the expenses. At some point, this equation will tilt post-retirement of the older cohort — so an annual update is needed to change the ratios.
Possibly the most contentious stage is when there are inheritance issues. And in inheritance, property remains the biggest item of contention. Financial assets are far easier to bequeath and it usually takes a nomination backed by a will and death certificate to move the money, but it is the immovable properties that end up many times in court. A Centre for Policy Research report (tinyurl.com/37jyfvr9) estimates that about a quarter of all cases decided by the Supreme Court involve land disputes and three-fifths of all civil cases in India are related to property disputes. Of course, not all are linked to inheritance, but these would make up a significant portion.
However, parent money issues might not be as simple as who gets what, but can have many dimensions. One listener discovered a home loan that his mother, a school teacher, took just a year before her retirement. She expected him to take over the loan, totally destroying his hard-fought financial stability. Another one wanted to find the money to compensate his sisters for the family home he had inherited.
Much of the discord can be avoided if only we would indicate clearly what we want to be done with our assets after we are gone. But even the topic of death becomes an emotional bomb in many houses. If a conversation is initiated by a son or daughter, there are two responses — you are greedy for your share or do you want me to die? Mostly it is neither, but just a desire to not have huge issues between siblings post the passing. The nominations and will are stage two decisions, the first is for us to decide who gets what after we are gone.
As I answer more and more questions around these issues of money and relationships, I find that a non-emotional, baggage-free approach works best. If we can separate the iron chains of past events that inform our reactions today and make decisions on money keeping fairness, rationality and responsibility in mind, our lives will be lighter. So will be the situation in Indian courts.
Disclaimer: I only answer strategy questions on the podcast, do not practise commercially and do not recommend a specific product.
Monika Halan is the best-selling author of theLet’s Talk series of books on money.The views expressed are personal