Every once in a while, I have to stop and think about how much consumption driven we have become. Indian’s were, and still are, one of the highest savers in the world. But things are changing rapidly with the young. Saving is not very high on the list of priorities.
Everyone talks about being green, buying green. We participate in new fads like the ‘Earth day’. Personally, I think that not buying at all is even better. Do you really need to buy a new mobile phone each year? What about the music player, the laptop, the car?
Whether I look at children or young employed adults, I see a clear trend. Everyone wants the biggest; latest; best, gadgets; phones; bikes etc. This is one American cultural influence I am not very comfortable with. Americans are known for their massive debt powered consumption. But imagine, with India’s population and her growing appetite what could happen to this planet?
What is causing this shift? Why are we becoming a consumerist society? I can think of a few factors.
peer pressure and societal acceptance / one-upmanship causes a lot of purchases. I refuse to let any latest fad or technology, define me. So I am neither a PC nor a Mac. I am me. I do not have an identity crisis, and do not seek to have peer acceptance. Consumption driven social status is not cool for me. If you think not having the latest gadget makes you a social outcast, may be you need a new set of friends.
Teaching the value of money
Could this change from a saving society to a consuming society be because parents are not teaching their children the value of money? I see several parents pampering their kids not end and fulfilling every request.
And even if they were not pampered, the newly employed youth would rather blow its pay check on the latest fashion or fancy restaurants rather than building a savings base.
An article in ‘get rich slowly’ shows the lack of training from parents. Wish there was a similar survey done on Indians. I wouldn’t be surprised if the numbers were equally bad, if not worse.
‘Did your parents prepare you well for financial independence?’
Over 1000 GRS readers responded:
- 17% of you said, ‘Yes, they did a great job in preparing me.’
- 17% said, ‘They did well ‘” I learned the basics.’
- 18% said, ‘It was okay, but they missed some key areas.’
- 48% said, ‘What preparation for Financial Independence?’
I too made some initial missteps, like buying a Rs. 1 lac (~2000$) PC at the age of 15. Although I can rationalise that it was that purchase that enabled the career I have today, the fact remains that a custom built (assembled) PC in the range Rs. 50,000 - Rs. 60,000 (~1000$) would have had the same effect.
All articles and reviews in PC World and PC Quest made me believe that the ‘multimedia computer’ was the thing to buy and comparing the offerings of HP, Compaq, IBM, HCL etc. I was convinced I made a good choice. But when I understood, that the same 1 lac could have bought a Maruti 800 at that time, I was able to put things in the right perspective. I learnt my lesson.
When I have to decide between an iPhone and an Android, I ask myself, ‘Do I even need a phone’? What else the 2000â‚¬ I will pay over 2 years for an iPhone can be used for? 2000â‚¬ is what I spent on my MBA, and invested wisely can pay my daughters college fees. So when the decision is between Apple, Android or my daughter’s college, I think the answer is easy. Which is why I don’t even carry a mobile. I don’t need one, I am away from a fixed phone for 1 hr a day, no more than 20 minutes at a time and never far from a pay phone. A few people will say, ‘What if there is an emergency’? Which brings me to
Fear, and guilt, are heavily used these days to manufacture demand. Whether it is for baby food, or bottled water or the latest educational concept, each marketer uses fear to make us part with our hard earned money. They play on our primal fears and blow things out of proportions. Only a few sane voices out there put things in perspective. But no one talks about the fear I care about, the fear of financial dependence. I deeply care about my financial independence, and which is the reason I never fear losing my job. In fact, I have secured the financial future of my family. If I want to, I can quit my job any day. Which I have already done once to launch a start-up.
In conclusion, all I can say is think before you spend. Ask yourself:
- Do you have financial goals? Are you on track?
- Do you really need it? Not want, need.
- Put things in perspective. What else could that money do? How much will it take for you to earn it?
- Can you afford it? Will it cost you, your financial independence?
- Are you doing it to show off, or gain social acceptance?
Be wise, be green, be financially independent.
I hope there is more discussion on this topic, but in the gadget-crazy world I live in, my voice might not be heard at all. But at least I will try, and if no one else, I am sure, my daughters will appreciate and care about financial independence as much as I do.