“Advertising or communication professionals feel they are going to work forever”

About 14 years ago, she quit journalism to pursue her passion of becoming an entrepreneur and helping ordinary people manage their money better. Rest, as they say, is history. I spoke to Srikala Bhashyam, Managing Partner, RS Consultants, about how communications professionals and, more so women, can manage their money better. Listen to the podcast here. https://www.digitales.co.in/industry-insights/mrigashira-podcast/radha-radhakrishnan-in-conversation-with-srikala-bhashyam-on-the-significance-of-early-and-timely-financial-planning/ 

In your experience, during the pandemic last year, what were some of the typical issues people faced due to inadequate financial planning?

I think we have never come across a situation like this. Something close to this happened in 2008 when the Lehman crisis hit the global equity markets and Debt markets across the globe. But then there, you know, there was hope. It is not going to last forever. And this kind of job loss also was not there. But this pandemic, staying at home locked up, was a first of its kind experience for all of us. Many people lost jobs, and an even more significant challenge was you didn't know whether you're going to get back those jobs, and if so, when. 

So, the people who have been into wealth, by I mean financial planning, were kind of okay. I think the pandemic hit the rich and the very poor badly. I would say the super-rich in the rich category. People who were entrepreneurs running their businesses had a fixed cost. They had to run their business, but there was no cash flow. I think the middle class got hit more by the pay cut than job losses. 

What’s the kind of impact as a result of the pay cut?

See, a pay cut was handled well by people who always kind of managed to generate surplus out of their earnings. However, the ones who were not planned or who had the fear psychosis panic. People were worried if COVID hits them, what happens? It was another unplanned risk; Even though we all know someday we will die, we are not prepared for it. So, we saw many knee jerk reactions happening for the first few months of COVID last year. 

Talking of planning, why is it so difficult for us to get into a financial discipline early on when one is young?

People need to get into income minus expenditure is equal to surplus mode early on. I think the pandemic has taught this well. We are all living in this world of uncertainty concerning life and job. Nobody can take the job for granted. Today, your income may go up or may not, or it can become zero also. So, we have to plan for all three scenarios. 

Do you feel our industry is a little flashy compared to some of the sectors or industries? How do you see this sector from the money management point of view?

Not only your industry, but most creative industry professionals think that money is not essential. They don’t attach too much importance to money. I feel there is that false security that I can earn because I have a skillset, and I will not retire. 

Advertising or communication professionals feel they are going to work forever. Even media professionals, nobody talks about retirement. They believe they can and will work as long as they are alive. But this pandemic has changed the game completely. Now, in all industries, whether it is media, communication, IT, everybody knows that they can lose a job and be without income. So, that is a significant change, and everybody’s waking up. 

Usually, women are not known to managing their money efficiently. What is your suggestion or advice to women professionals?

Women are brilliant in all other things. When it comes to money management, they either believe that they don’t understand it or it needs to be managed by someone in the family. Even in this era of feminism and equality, somehow, women don’t pay so much attention to managing money. It is mainly outsourced to another family member, either their spouse or sibling or father. However, many women are very savvy concerning money, are even so bright, and manage their spouse wealth. Of late, we see this also. I think for women, money management is equal to driving. I think, even if you are good, you believe you are not good at driving.

I think it is social conditioning. We insist that, when there’s financial planning, both husband and wife should sit in the meeting. It is essential because we are living in an uncertain world. If something happens to your spouse, at least you should know how to manage whatever wealth is there with the family. 

There are many in the gig economy today. How can they be better financial planners?

In the gig economy, there is no guaranteed fixed income. For such professionals, we tell them when you earn, set aside 50% of your earnings and don’t spend it. Consider it’s not your income. That becomes like an emergency fund. So, once this kitty gets more prominent, we move it to long term investments or savings. Ultimately all of us need to realise that financial planning starts with us and ends with us.