Book Summary

Let’s Talk Money – Monika Halan


For quite some time I have been struggling to keep up with my cash flow with ever-changing life (expenses, savings, investments, EMIs, etc…)

Then, I stumbled upon this book “Let’s talk money” by Monika Halan. It has definitely made me realize how under-prepared we are in life. I would recommend everyone to read this book. It is a very simple short read, yet has many thought-provoking questions and ideas!

For those who are busy and cannot read the book, this blog is just a sneak peek of the book and my key takeaways.


One should always start from the very root and then build a system using this as a lifeline.
Cash-flow for most of us is the salaries we get, maybe few of us have other streams of revenue.
Most of us can agree to this — Money comes in and goes out without you having much clue about where it’s being spent!
Also, It is painstaking to keep track of every rupee being spent. I have tried a few expense tracking apps but didn’t help me much.
The book recommends having a three-account system:

Income Account — Salary comes in.

Spending Account — Average monthly expenses.

Invest-It Account — Invest for future goals.

As soon as you get your salary, within 30 minutes move it out of your income fund into respective bank accounts! (Well, not exactly 30 mins 😉 maybe within a day)
This allows you to categorize the cash flow and let you do guilt-free spending while taking care of your future goals!


Health Insurance and Life insurance is something which is very very crucial, some of us have it, some of us don’t.
I don’t have to explain how important this is, so take your time to find a good policy and enroll.

The book shares quite a few shocking real-life incidents which might make u feel scared, but will certainly push you to get the insurance done!

There are quite a few metrics which the book talks about while filtering such policies. I don’t want to give any spoilers 😉

Hint: “Mint SecureNow”

Many of us are offered Health & Life Insurance at the workplace, but Monika advises in the book to get your own policy because you never know when you will switch jobs or when company stops loving you back 😉


The book also recommends having a rainy day fund for unexpected situations like recession, losing a job, maternity, health issues, etc.
The recommendation is that you have at least 6–12 months of monthly expenses saved up as an “Emergency” fund.
You can have it either in:

  • Flexi-Fixed-Deposit
  • Liquid Fund (Debt Mutual Fund)

Both give decent returns of about 6–9% and are safe investment instruments with minimal risks.


Once you are done with the Core Foundation (medical and life insurance) and Rainy Day Fund, you can start building wealth based on your goals.
Monika makes an argument across different asset-classes like Gold, Real Estate, Debt Funds, and Equity Funds, of all Equity is undoubtedly the most rewarding financial instrument on the planet!
Well, there are about 5000 stocks and hundreds of Mutual Funds available. It is definitely not an easy task to find the right one. The book tells you to consult a financial advisor for a more clearer roadmap.
You can think of each of these financial instruments as a vehicle i.e., Cycle, Bike, Car, Truck, Bus, Train, Plan, etc…
Each one will take you from Place A to Place B.
But not everything is not suited for every situation!
You won’t take a plane for a supermarket!
You won’t cycle from Bangalore to California!
Similar to this, there are different financial instruments for different purposes and it is important to spend time and understand them or seek help from a financial advisor.
The book also suggests a general guideline, which may work for most people!
Construct a portfolio having three buckets of mutual funds:

  • Almost There
  • In Some Time
  • Far Away

The argument Monika uses in the book is that each financial instrument has an expiry date (not exactly, but sort of). She argues that different funds perform well for a different time duration.

“Almost There”

This bucket is for goals with a timeline of 0–2 years.
Types of mutual funds which are best suited:

  • Liquid Funds
  • Ultra-short Term Funds

“In Some Time”

This bucket is for goals with a timeline of 2–5 years.
Types of mutual funds which are best suited:

Dynamic Asset Allocation/Balanced/Hybrid Funds (both aggressive and conservative type depending on your risk profiles)

“Far Away”

This bucket is for goals with a timeline of 5+ years. For goals like retirement, kids education, kids marriage, etc.
Types of mutual funds which are best suited:

  • Index Funds (for Passive Strategy)
  • Multi-Cap Funds (for Actively Strategy)
  • ELSS Funds (for Tax-Saving)

Time Just Flies

With time you have to Rebalance your buckets, example goals like retirement will move from “Far Away” bucket to “In Some Time” bucket and so on…


Creating Money Order

One of the major problems in saving is the cash spent on the expenses and after which hardly any money is left to save. To understand this we need to understand the psychology behind it, that is whenever we see money lying in the bank account the brain thinks that it is free that can be used for expenditure. Hence to have savings we need to have a system in place to start saving.

The first system mentioned by Monika is to create three different accounts – Income account, Spend-It account, Invest its account. As per the name, the same is the function of the account. Every month the money is credited in the salary account then transfers the money in respective accounts within 30 mins.

At times you may even get the call from the relationship about not to transfer funds so rapidly from the salary account because they have their deposit targets to be achieved. Now start tracking your monthly expenses with various money tracking apps.

Rule of caution: Never, I repeat ever transfer the money from Invest-it account to Spend-It account. The first aim should be to transfer at least 10% of the total salary amount in the Invest-It account. In cases, this may not be possible to start from 1 % and gradually increase it.

A general thumb rule to follow 50 (living cost)-30(EMI payouts) -20(Savings)
Once these accounts are set -up you need to set-up funds for emergencies, this can be used only in unplanned emergencies.
So how much do you need??

  • Emergency funds should have at least your 6 months living cost.
  • If a single income with a dependent parent has 1-year living cost.
  • If double income with no dependents then 3 months of living expenses.

Invest this money by creating several FD so even if one FD is used up the interest on the rest amount is not lost. Invest in Flexi-FDs or even short term debt funds.

Building up the Protection

Most of us don’t view insurance as life cover but as an investment which defeats the whole purpose of insurance. Most Indians think that insurance provided by the employer is sufficient but that is a major misconception. If you lose the job you also lose out on the medical insurance from the company.

Always have insurance to protect your savings, the medical expenses also depend upon the type of hospital and the type of rooms used. The author mentions that as a thumb rule 3 lakhs for small towns and fewer facilities, and around 15 lakhs for the metro cities with posh facilities.

For an insured family, one must opt for a family floater which includes Father, mother, and two kidS.

The next step is getting insurance for the family if there is a loss of the breadwinner in the family. For that, one must have a life cover. The common misconception as per author is that people think if they get nothing back it is a loss. But the purpose of the insurance is to provide financial stability when there is a loss of the bread earner in the family.

How much amount should be insured, a basic thumb rule is to have around 8 to 10 times the annual take-home income. You should buy this insurance when you have dependents or the possibility arises. Learn about things to consider when buying insurance

Understanding Investing

Most of you resist investing in the long term this is because to keep some money liquid for the emergency. At times people resist investing because of a lack of knowledge in investing.
Most people think that the share market is a sort of gambling and think it needs a huge amount of money to start investing and postpone it to a later stage. A basic investment can start from a bare min of Rs 1000.

A lot of people invest but fall prey to inefficiency, low returns & high cost. The first main point is understanding investment and also creating investment goals around the. Understanding financial terms is an important way to kill the confusion. The less you understand the more chance that you can be cheated.
Any planned expense that occurs in the next 3-5 years is termed as a short term investment. Anything more than 5 years is a long term investment. Expenses that can be deemed short term is buying a car.
Investment asset classes are
Debt – A financial product that is based on borrowing.
Equity – Is ownership of a business that bring along the risk directly ( stocks ) or indirectly ( Mutual Funds)
Real Assets – Includes all tangible investments like gold, real estate.

Let’s Start Investing

Investing in debt, the role of debt is to provide money in short notice and to provide stability to the long term investment made. Then why not invest all the money in debt you may ask ??

The aim of debt investing is to provide stability and not growth.

Investing in gold (Real asset) – Monika mentions that investing in gold should not be more than 10% of the portfolio value as a gold sovereign bond which is backed by the government and fetches yearly interest of 2.5%. The disadvantage of holding physical gold that value depends on the purity and making charges hence drops the value for it around 10-30% at times.

Real Estate (Real Asset) — According to this book, people see real investment as a good option because they see it from point to point investment i.e a house purchased at INR 50 Lakh and the end sell it for INR 1 Cr.But people forget about the maintenance charges or the property taxes associated with it.This averaged out gives a return of about 12% on real estate.

Equity gives out profit through capital appreciation. Investing in equity is not like gambling on the street once you understand the fundamentals of stock markets.

FDs provide lower returns and destroy the purchasing power due to inflation. Gold does badly because it goes through ups and downs and eventually loses the steam when compared to equity on long terms.

While investing in the market, holding the investment for a longer period is key to get good returns on the investment. Investment should be easy to exit, cheap, and easy.

Mutual funds are one of the best ways to expose to equity.