Money is a tricky & sensitive issue for people but more importantly sometimes it’s a head scratching issue that leaves you thinking about the worth of money. Some people spend lavishly while others keep saving their earnings sometimes to such an extent that they keep saving until they are never used. This is backed up by the fact that nearly 18,830 crore rupees are lying unclaimed in Indian Banks, this is as of 2019. So we have to ask, to whom does this money belong? Well most probably they are people who have not claimed it in more than 10 years, many of them may be dead, many of which have no inheritors.
Why did they work towards saving so much money if there was no way they could spend it or pass it to the successive generations? A research found that most people save up or build assets if they can, even in retirement, the question remains why?
The data collected was spread out as 40% of the sample said Unforeseen Cost was the primary reason for their saving, 20% said legacy, 13% said money in the bank made them feel better, 7% said that the fear of running out of money is their primary reason and finally 20% did not want to spend money even in retirement because according to them money once spent cannot be recovered.
So the question arises, why earn money if you cannot spend it? What if there is a possibility that you can save money without being excessively frugal? While 75% of the Indian population is literate, only 24% of the adults are financially literate meaning only 24% of Indian adults understand the basics of saving, investment, debt, and budgeting. The lack of financial literacy is a global problem. Most of us end up turning to our friends and family for matters of personal finance, who might be clueless as well. So what should we do? The answer again lies in our school classrooms, it’s there that we should start talking about finances. We must include financial literacy in the school curriculum. It will help people understand economics, understand loans, interest investment, budgeting, taxes, etc.
The key to a good financial life is not saving aimlessly & repeatedly, it is conducting smart investments. Thus it’s an area that we must all take interest in. What should you do if you lack knowledge in this area? Well the internet is your friend as there are many courses available on fundamental finance. Many of these courses are free to take, and at your own pace. It’s never too late to take a step to educate yourself and see how to maximize your savings, to fully secure your tomorrow without sacrificing your present.
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Kshitij-Barua, PGP Batch Indian Institute of Management Ahmedabad |
