Good Money habits we can learn from our parents
Mr.Rajesh Iyer(37) has fond memories of his childhood days when his father was the only earning member in his family of 4 siblings. His mother was a homemaker and was supposed to take care of the children and the kitchen. Rajesh still doesn’t know how much his father used to earn but he vividly remembers that the first thing he used to do on getting his salary was to give a part of it to his mother and the rest was deposited into his father’ bank account. His mother was supposed to take care of the monthly expenses from that amount. A couple of times, Rajesh used to accompany his father to his bank only to stand in the serpentine queue to deposit his money. He never understood that time why the money was deposited there in the first place. Secondly even though the bank was nearly 2 kms away from their chawl where they stayed, his father never took the bus but preferred walking in order to save some money.
Inspite of having 4 children, Rajesh’s sole earning father was able to provide good education to these children, all of whom are well placed in good organizations today. Even today his father takes care of his daily expenses and medical bills from his own sources which have been invested diligently in fixed income instruments. Rajesh is now used to hearing from his father on how he saved Rs. 2 the other day by walking 2 stops and boarding the bus from that stop.
Today one may argue that circumstances were different at that point of time and certain money traits of our parents are not relevant in today’s world. For example, things which were luxuries earlier have become necessities. Today, time is of the essence and everything has to be acquired pretty fast otherwise we may suffer from inferiority complex. But on taking a closer look, we come across some traits or habits of our parents which are still relevant in today’s world like…
- Save for a rainy day: Even without any formal insurance arrangements that time, most working parents thought that it was necessary to save some money regularly which could be utilized for any requirements in the family. Inspite of not having a plethora of products available that time, the humble fixed and postal deposits fulfilled the requirement of safety and guaranteed returns. It was a simple product which could be understood by the masses. Today inspite of having good income, most are too lazy to save, forget investing. Some are not even able to save as high lifestyle expenses ensure that they end up splurging more than they earn. Today we are spoilt for choice to invest in a plethora of products and asset classes, but end up keeping our money idle in savings account due to lack of time to invest.
- A penny saved is a penny earned: Most mothers don’t buy anything unless they see a bargain or unless the seller reduces the price. Today due to paucity of time, we end up paying an inflated price to avoid any arguments and waste of time. Secondly eating out on several times even without any occasion has become the norm with most people. We even end up buying more than we need at times just because there was a so called “discount sale”. Like our parents, we can avoid or begin cutting down on unnecessary expenses which in turn can boost our savings.
- Stay away from debt: Most people would vouch for the fact that their parents never dared to take a loan to buy a house or any utility item as they believed that it would only be right to earn, save and then buy. Sometimes debt is good especially when we want to buy our self occupied property, but not at the cost of taking a very big loan where you end up paying a major amount of your monthly income. Avoid multiple loans as too many loans can also push you into the debt trap. Our parents did not believe in instant gratification and therefore they steered clear of most troubles.
- Create a good support system by maintaining good relations: Our parents who lived in the joint family system ensured that the entire family lived and shared their good and bad times together. Today with nuclear family system being prevalent and add to it our busy working schedules, the social touch and our relations has taken a severe beating. We live in times when there is too much of economic uncertainty. Under such difficult times, only your near and dear ones can be a great deal of financial and emotional support. Even during medical emergencies, those close to you can provide great support only if you have been able to maintain good relations.
Steven Fernandes, Certified Financial Planner
Chief Planner, Proficient Financial Planners.