Where Indian money management goes wrong

Indians are known as value-conscious buyers. While we do a great job at buying things for the right value, there is much more we can do to improve our money management. Effective money management depends entirely on your mindset. Let’s jump into the points!

Indian weddings:

I had to start with this one because it is the most crucial. Not only because of its financial impact but also because we have one of the youngest populations. An average Indian wedding cost between 200k – 50 million INR. Weddings are supposed to symbolise the start of a new journey between two individuals but now it’s become something else altogether.

Firstly, the Dowry system needs alteration. This is not a business relationship where favours are considered normal. The Dowry system has financial repercussions which are often overlooked. It creates unnecessary financial pressure and expense for the bride’s family especially if they are from a low socio-economic stratum of society. Also, it keeps the poor in debt and does worse for a country with one of the highest income inequalities. Furthermore, due to information failure and poor education, it causes death for women especially in rural regions. In addition, it is dehumanizing women as goods that can be traded for ‘Dowry’. Overall, it creates a loss-loss to all.

Secondly, ‘Log kya kahenge’ (What will people think) One of India’s favourite ‘necessary evils’ which is 0% necessary and 100% evil.

Planning the wedding on the basis of how to cater to the guests is not correct. For example, I have attended weddings where they showcase expensive gifts, big boxes of Indian sweets and many other things to make it look grander. One needs to self-reflect on why they are doing what they are doing. One needs to ask themselves, is the opinion or a judgement by an individual worth the mental energy loss? Does one really live their life fully when lived with such a mindset? What is the ROI on such thinking? Small thank you, hugs, good impression. Is that going to be relevant in the long run? One needs to realize this may be a sign of low confidence, self-esteem, and their belief that they aren’t where they want to be. Your worth lies not in showing off but in your heart. This allows one to make mindful decisions and lead to better financial planning.

While I understand a person’s, wedding is a special day for them, the end goal should always be to celebrate the start of a new journey between two loved ones. It is not a reflection of how well a family can throw a celebration.

X% off is not X% saved

Brands have effectively used neuromarketing techniques to change our beliefs on discounts. Mall outlets and Amazon are especially known for this play. There is a misunderstanding for consumers when brands decide to launch attractive price offerings.

For example, let’s assume a T-shirt worth 1000 INR is now priced at 700 INR. This means you saved 300 INR? No, it simply means you spend 700 INR. Does your bank ask you how much discount you received?

This is also called as scarcity marketing because these discounts are made exclusive and for a short period of time. Making decisions by looking from both the seller and your (buyer) side is essential to make sound decisions. One should buy stuff from a cost-centric mindset rather than savings-centric mindset. Often times, these discounts are to lure you into their brand ecosystem so that they can increase their customer base. Amazon’s entire business model is based around cost leadership. They make the pricing so attractive that you cannot resist. Although it is completely legal, we as consumers need to think of spending that will benefit us over the long term.

Rewards in India

The gifting culture in India has recently changed. Gifts are meant to showcase love, affection, thankfulness and/or respect. Nowadays, it’s become a duty to gift for certain instances like when traveling abroad, when your child accomplishes something or during a festival just to name a few. Don’t get me wrong, I am alright with gifting but the ‘why’ behind the gesture needs to be understood. The reason for gifting should never be an obligation, it should be one’s desire, genuine and not driven by the social norms.

Often times when a child accomplishes something they are rewarded in cash or materialistic good. This is something I have faced often during my childhood and still do. While I do understand that it’s easier that way, it shouldn’t be done each time. This is because you are quantifying their value, effort, and time spend to reach that place. Instead, they should be encouraged to keep going, provided mental boost, guided further because celebrating success is essential but to keep moving forward is important as well. Furthermore, providing financial incentives for a job well done can encourage the child to further do well but now for the purpose of receiving the reward again. This changes their end goal to achieving the reward than focusing on the process, task and may even set a benchmark.

I believe money is a mindset game. If you are wise, can see the bigger picture, do self-reflection, you are more likely to be financially stable. Remember, money is just the tool, your goals and desires need to be much more than that. If you want to learn more about how you can improve your financial game or improve your mindset, below are some of my favourite sources for the same.

• ALUX

• Rich Dad Poor Dad channel

• CNBC Make it