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Why is it that most of us are still sleep walking our Financial life ?
There might be several reasons. Let’s try and uncover a few. 

Our upbringing as a child and the thought that everything is limited and hard to achieve might have been a key contributor. 

I was born in a middle class family in India. We have all seen our parents struggle on the financial front during some or all part of our childhood. For a salaried middle-class 1st week of every month came close to those End of the world Zombie movies. The scene of a family trapped in a cottage with hoards of zombies at the doors ready to pounce on them. The only difference in real life , the zombies came to collect the payments due, instead of our brains.

A typical rundown on weekend that each one of us must have gone through ( if you were from a middle-class ) would be nothing short of roller coaster ride… Here are some of the mundane tasks a typical Middle class family was stuck doing…

1. Trying to save small – penny wise pound foolish.

My brother and myself would drink a litre of milk each ( initial few years of our lives, we were in northern India and drinking milk was something we picked up from there. My dad working in a public sector with transfers being frequent). The milkman who never delivered on time would arrive super early on the 1st of every month with a big grin.  Basanti , the cow would be at the gate eagerly waiting and hoping something juicy to eat would be offered by the homeowner. Outstanding payment would be calculated looking at the yearly calendar hung at at odd angles with the help of a rusty nail ( Calendars were put to good use in those days, only mom or dad could decipher the cryptic scribbling though).

The calendars often clad a layer of dust, hanging on the wall that was deprived of paint. The calendar had designer circles around dates accounting for days when milk was not delivered. After a lot of back and forth, a common agreement on pending dues would be agreed upon. Just before settling the payment, one of the parent would bring up the all-time never resolved complaint – “You are adding a lot of water to milk these days, if this continues we will discontinue your services”. Milkman would act offended and swear on Basanti – “the milk is as pure as river Ganga !”. (Sadly no one can refer to the river Ganga these days for purity). The milkman had probably added milk in water and was swearing guilt free. The pain when money left the hands was real. Especially when you see someone else counting the money you owe them. 

“When you grow up you will realise how hard it is to earn money”

-typical parent of 90’s

Next one to arrive the Electricity bill. This was hand written paper the size of a memo. The beautiful “easy to read” handwriting was of a designated officer of the Electricity Supply Board who had an art of reading the Power meter. I would then hand over the cryptic text to my Dad. The feeling was that of handing over a school report card for a sign of approval for the bare minimum marks scored. Dad would then give out a lengthy lecture on how the bill had been more than normal this month. “You guys have no value for money … keep everything turned on and see what has happened, the meter is running so fast even now” . He would then hurriedly turn off all the lights and fans and ask everyone to assemble in a hall to save on power bill. “Money is being burned by you guys” was the concluding statement.

Being a kid with immense curiosity, I would climb on a chair to analyse how fast the meter was running 🙂 .

Those days the power meter was a mechanical black box with a horizontal wheel at the bottom.The spin speed of the wheel would correlate to the power consumption at that exact moment. A fast spin meant more appliances, fan, light were on.

Proud of my analytical skills, I would get off the chair and announce – “We are burning money again!” to my Dad. Saving electricity is certainly a good thing, but does not warrant someone becoming well off saving on electricity bills.

Unfortunately, frugality in power consumption would go on for a week and be forgotten soon to fall back to our old ways and would come back only when the next bill arrived.

2. Dream to get rich quick… 

Lottery tickets were hugely popular in the 90’s ( might be even today, but none in my family, buys them these days ). There would be state organised lotteries, and most people would fancy buying them hoping that their miserable money crunch would miraculously come to an end. If you are aware of probability theory , the odds of winning a lottery are very clear. Research has shown that people believe in picking a lottery with a number of their choice, this somehow makes them feel they are more likely to win one. People have lost huge savings buying lottery and pouring into several such get rich quick scams. The chances of someone getting struck by lightning are higher when compared to winning a lottery.

3. We cant afford it…

Every time my parents told me they could not afford it, I would tell myself , “that can’t be true. Why is there not enough ? How to fix this ?” ran through my tiny brain. Later on in life, I realised my parents did it to teach me the value of money…

But in most middle class families this is usually the case. They are living pay-check to pay-check and its hard for most to make ends meet. The kids assume that it is almost impossible to come out of this trap.

What/who turned it around for me ?

Luckily my grandad was rich and never complained about money. Grandad always talked to me about money and how compound Interest worked its magic in his life. How he was once poor and things he had achieved by saving and investing in the right investments.

As soon as I got my first pay-check , I told Grandpa about it. He was quick to point out , “Make sure to hide a large portion of it in such a way that it gets hard to spend”. He also said “Nail it to a wall , every time you try and remove ,the currency note should get damaged and cause you equal pain 🙂 “.

This lead me to create Public Provident Fund ( PPF ) account . You see, it gets locked down for 17 years and hard to remove ;).

My initial years of life , I was saving huge and that lead to a habit that has continued even today. We shall discuss more on savings and investment in the future posts…

Majority of us spend time haggling with the street vendor while buying vegetables , fruits , clothes etc even to this day. It’s a feeling of pride, when you get something for cheap, even when it is of not much use to us. This thought process is being capitalised on by E-commerce sites selling us junk in the name of SALE!!

I can assure you , one cant haggle their way into building a freedom fund that will help us retire early. The middle class mindset of living hand-to-mouth should stop. This can only be achieved when we look at smarter ways of investing ! Hoping that we stop wasting time on things that don’t matter and make every moment count towards building a Freedom Fund.

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