Navigating the maze that is personal finance

Monday, 31 July 2017

The changing saving habits of Indians - a commentary

I was reading an article in mint about the spending habits of Indians. It talked about why Indians find it hard to spend their money. I believe that culture has a big role to play in this behavior.

We are known as savvy savers and one who would squeeze the worth out of every penny. And boy do I take pride in this comment/compliment (depending on one's point of view). In a study it was found that 75% of Americans would be unable to arrange an emergency expenditure of 500 dollars. By contrast a much higher number of Indians would be able to do so (there is no number to show here but my experience says most of those around you would somehow manage the number if required).  In other words they may live in comforts better than ours but their existence is hand to mouth.

As years are passing we are incorporating this culture of consumerism in our daily lives. Whether it is buying more clothes or changing gadgets (including mobiles, cars etc.) frequently we are more and more getting inclined towards consumerism (I have known people who have spent money on mobile equivalent of their one month salary). Though we still seek value for money / deals (data of sale season revenue of popular online sites would convince you of the same), but in my opinion this habit will not survive another generation.

There is no denying that, opening of the Indian economy in 90's changed the economic landscape of India. It brought more jobs and wealth to India and made moving the social classes upwards easy. Jared Diamond (in his book- Guns, Germs and Steel) would tell you that any culture or economy that will not adapt will ultimately perish away.

The whole point here is while it is worthwhile to spend and enjoy your money, at the same time it is worthwhile and prudent to save. A balance with culture of saving is required so that we are not engulfed in culture of spending.


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  3. Humans are the simple animal. They always choose from three options. First one is “adapt to” – when people adjust for some situation. Second one is “change the surroundings” when humans changing world around them to fit their expectations. Three “to die” – when people do not choosing 1 or 2 options they usually was going to die soon. However, nowadays it’s much more complicated. Still these patterns of behavior are still relevant. In reviews on was something similar to the second one.

  4. It's possible to change these habits. It's not a big deal, really.


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