Hello, I met my childhood friend Swami after a long time. Swami, right from his childhood days was very keen and curious about family finances. I told him that I am planning to write a chronicle on family finances and I would like to pick his brain for relevant personal experiences/stories. Swami agreed. What follows is the notes from my first meeting with him based on true life experiences.
Swami told me that spending within limits and ability to manage higher savings have been proven mantra of our Indian families. This has helped our parents and ancestors manage a larger family with lower means in those days when there were very few investment opportunities. In this process, essentials (e.g. Food, Education) were never compromised; only the wishful list of items was pared.
He narrated a couple of incidences from his grandfather’s diary.
Buying Smart
His grandfather was born in the 1920s. He was a teacher and managing a family of seven kids with a teacher’s meagre salary was not easy. To aid/supplement his income, he did select tuitions. Inspired by Gandhiji and being a patriot, he wore khadi clothes all his life. This was a symbol of pride for him. In addition, it also let him keep his costs on clothing down. He used to buy khadi clothes only in the month of October because khadi was sold at a discount in that month being Bapu’s birth month.
Be Honest, Encourage Honesty
His grandfather was very honest and would not let others do any wrong. Once he went to a Kirana store and bought a bar of SunLight soap, whose price was 31 paisa. The Kirana store owner (KSO) charged him 32 paise (1 paisa extra), which he came to realize only when he reached home. While it was a matter of one paisa, he would not take it lightly. The next day he wrote a postal letter to the authority in the company asking for their help. The company’s officials reached out to KSO and told him that he needs to return the money immediately otherwise he would risk losing the contract. The KSO immediately reached out to his grandfather and asked for forgiveness. He wanted to give some additional items in lieu. His grandfather took one paisa from KSO and a promise from him, to be honest in his life.
Swami shared another intriguing story about his eldest uncle on expense management.
Every Penny Matters
His uncle had a large family with five kids and the family was cognizant of the importance of spending money only for the real needs. Around 1985, all his kids were pursuing higher education and he had to simultaneously pay Equal Monthly Instalments towards the loan for the only plot he had bought for building a nest for the family. The financial situation was really tight and he wanted to explore all opportunities to optimize the expense. One day he was diligently going through the list of items to find out if there is anything, which can be done away with. He could find only one item and that was the newspaper. Since he was getting the newspaper in the office at his desk; he decided to stop the newspaper at home, thus saving ₹ 5 every month.
As my discussion with Swami was progressing, I was getting more absorbed with his simple but powerful observations. Before Swami could start with his next titbits, a call came and he had to cut short our discussion. I let him go but with a promise for another session in very near future.
I will shortly be back with notes from our next meeting with him. Till then keep a check on your expenses and put a conscious effort to save more.
To read the next narration from Swami, refer https://finmyn.com/learning-nuances-of-equity-investment/
To read all submissions from Swami, refer https://finmyn.com/category/swamis-titbits-on-family-finance/
The writer is a SEBI Registered Adviser and Founder of FinMyn (https://finmyn.com). He provides Fee-Only Financial Planning and Investment Advisory services. If you want to know more about him, click on https://finmyn.com/about/.
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