Indian parents. Or what you call that species of human beings for whom you will always be a baby in your diapers, no matter how old you get and what great things you achieve in life. Or the ones who will always be there to help you navigate through life and at the same time not forget to say ‘ Kaha Tha Humne’ at your worst mistakes and remind you why you should have listened to them in the first place. And let’s be honest,they are mostly right! Truth is, our parents play the biggest role when it comes to taking the most important life decisions and their attitude towards life influence us like nobody else. This is true for money as well!
About the author: Ajay Pruthi is a fee-only SEBI registered investment advisor. He can be contacted via his website plnr.in. Ajay is part of the freefincal list of fee-only advisors and fee-only India.
Also by Ajay
When Indian parents are not throwing their chappals and belans at your stupidity and your inability to do the most simplest things in life, like waking up at an appropriate time in the morning, they are teaching you how to be an adult and preparing you for a life beyond them. In this journey, they understand the value of money by constantly reminding you ‘ Paise kya pedh pe ugte hain’. But there are other ways by which Indian parents can teach their children and young ones how to handle money :
How to make a budget
Remember all the times your Maa asked you to do groceries and gave you a million things to remember by heart on your way to your local bazaar? Remember how exact the amount of dal was that she wanted and the exact bottle of mustard oil from that old uncle’s shop down the lane ? Well, nothing was random just to test out your poor memory skills. It was all a well coordinated and efficient list of things she knew she needed and she gave you just the exact amount of money for it as well. Years and years of good budgeting skills and experience made that happen. This is the biggest lesson they teach you!
Nobody does budgeting better than Indian parents. We are sure, if we delve deeply in the history of budgeting, an Indian aunty with their next level calculations of all that is required in a household in a month would be one of the pioneers. As parents we need to teach kids and young adults the same thing. They need to have a proper idea of how to budget : they should have a fair idea where they are spending their money and how to stay within a particular limit when they have a limited supply of it! What is absolutely essential in everyday life and what is not- it all becomes clear when you develop the skill of budgeting!
Let them know how banks work
In India, if you have responsible well-to-do parents chances you are already have a bank account to your name. Most Indian parents work their hardest to put their child’s needs above their own in every situation and throughout their lives you will find them keeping aside money for their well being. Whether its for higher education or just something to fall back on in case of their untimely demise, there must be a bank account to their child’s name.
As we grow up we need to understand how to use that money and basically how banks function.While in this age of the internet we can learn everything from the interwebs but if your parents personally see to it that you know the basics like how to use your account,how to take money out,how much interest your current bank is giving you then that lesson is more hands-on and understandable.
Teach them the importance of savings
As youngsters of this era we start working early. Whether it is internships, part-time or full time we are told that the more experience you have in the professional world the better your chances at your dream job! With the experience also comes money. Now,while young adults are supposed to be notorious and expected to spend everything on their whims and fancies, that is not always the case! This generation is also known for being driven enough to move to a different city for work or have enough to travel the world so they do save- contrary to what old mohalle ke uncle and aunties want you to think!
Now this is where our parents come in! They should teach us the importance of savings and encourage us to open a savings account. As they have lived through financial ups and downs in life nobody could be a better teacher to make us understand what are the dos and donts when it comes to savings and how to prepare ourselves during rainy days!
Teach them the benefits of investment
With the ever growing unemployment rate and diminishing work wages in India,just having a 9-5 job does not bring the kind of stability one wants financially as it used to! So we need to explore newer avenues to make more money, especially one that does not depend on having a job. Investments have always been a thing in India- especially ones which give long term benefits. So to a young adult starting out in life with fresh income and enough to save, parents should teach them the value of investments. Since property days are gone now, young people nowadays can invest in mutual funds, FDs, PPF- the possibilities are endless!
How to overcome peer-pressure and herd mentality
Youngsters and young adults are prone to making mistakes in life! If they don’t, how will they learn life’s greatest lessons. But a lot of these errors stem out of peer pressure and following the herd blindly. Amongst Indians, like all relationships we value friendship on a deeper level. But when these so called ‘friends’ make grabby hands towards your hard earned money and influence you into spending a substantial amount of it for their own advantage,its time to draw a line! We have all heard our parents at one point or the other telling us ‘ Yeh dost thik nahi hain’ and when it comes to leeches they are correct!
How many times have we been cajoled to do something we did not want to do in the guise of ‘Kar na. Sabhi kar rahein hain’ In this Bhai-Bhai brotherhood ecosystem, a so called Bhai can easily pressure you to waste your money to preserve your standing in a group of friends! This is peer-pressure! Or you might see someone spending their money in a way and influence you to spend the same complete disregarding facts! You just want to be another cattle in the herd! It is our parents’ responsibility to teach us from early on in life to never allow such friends to take advantage of you so much so that you tend to lose your own financial stability!
They should also pay heed to the fact that their children should know better than lending money to leeches who pretend to be well wishers and friends. These people will never return a single penny back so beware!
How showing off is futile
Are you the kind of person who thinks that the key to a good friendship is showing off your new gadgets and giving your friends an inferiority complex? All this while your balance is in the red and your ego is sky-high! Well, you can’t pay bills with your ego so spending money just to show off is so unnecessary and completely useless! This is a lesson Indian parents can’t forget to teach their kids.
We want the new iPhone, the new airpods,the new Xbox and what not to showoff to our friends and we spend so much money from a barely started career to fuel this lifestyle! Parents should instead teach them to spend only on essentials and things that are useful in everyday lives. The rest can be used for investment and savings! You don’t need to buy limited edition Nike shoes just because you want everyone else to see and feel jealous! You know what they really should be jealous about? Your always-in-the green and flourishing bank balance!
To avoid debt or loans
Admit it,we all had that college canteen wala Kaka or dada to whom we used to say ‘Ek Chai de do aur khatein mein likh lena. Badh mein de denge’. And with a heart of gold, that man probably never asked you for his dues! But this is not the reality of the world. Usually when you take a loan or debt you have to pay it back with interest! So parents should make sure young adults know the gravity of taking loans or being in debt.
If you are a youngster when taking a loan,say an car/home loan, chances are you have to work for years in order to pay it back which is not an easy burden to carry! Not only bank loans, sometimes we take a significant amount of money from a friend in times of need without thinking about the consequences of our actions! As we all get to understand with age, mixing ‘Dosti’ with ‘Paisa’ is not a good idea. So parents should make sure their kids understand what debt like this even to a friend could result in the future.
Know your worth of your degree and hardwork
There are so many people in this country who work hours on end and still don’t see the kind of money in their entire lives compared to what some others get for minutes of their time! While youngsters work for free in the initial years of their career, there are some companies who take advantage of their inexperience and pay them peanuts for their hard work. Therefore how to identify such practices and how to analyse the worth of your degree and hardwork in life and what exactly you deserve to be paid for it- these are basics parents should instill in their child as they embark on their career early on.
How to shop less and only for value
Let’s collectively confess something- our generation has a shopping addiction! In this age of fast online shopping, thanks to Flipkart,Amazon, you can get whatever your heart desires in a virtual cart and at your home within a day or two. Hence we can’t stop ourselves from splurging! But not everything you buy is what you need in the first place. Also what if something equally better is available at a lesser price? Or something is a bit pricier but is bound to last longer? These tidbits of value shopping can only be taught or understood by experience.
Save your kids some time and impart this wisdom. Let them know how expensive is not necessarily better and cheaper is not necessarily efficient! Whether it is their first motorbike or car, or a house they are renting- helping them make a value-based decision is a must!
Convey the need of a retirement plan
Now this might seem laugh worthy- asking a youngster to think about retirement plans even before they can take a dive into a professional career but starting early about what their financial goals are and how to achieve them and to figure out the money they need to maintain their perfect lifestyle- all of it eventually leads to thinking about how long they want to work for and what other plans they have. Parents should urge their children to save as much as they can, invest in profitable ventures and reach a position of security not only for them but also their future spouse and family.
Final Thoughts
You will find few parents in the world as supportive as Indian parents! So what if they don’t waste a second to give you squinty judgemental eyes when you forget to turn off the fan or when you wake up in the afternoon? That’s all part of the tough love parade. Because along with that,they give you the best lessons of life, especially regarding money. So we youngsters should keep our ears open and listen! Maybe then they will finally stop saying ‘Nalayak! Sharma Ji ke bete se kuch sikh!’
*Disclaimer- Nothing contained in the article is a solicitation, recommendation, endorsement, or offer by me. If you have any doubts as to the merits of the article, you should seek advice from an independent financial advisor. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Investment in securities market is subject to market risks. Read all the related documents carefully before investing.
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Dr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over ten years of experience publishing news analysis, research and financial product development. Connect with him via Twitter(X), Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.
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