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How Money Matters In India

How Money Matters In India

March 20, 2012
Susmita Sen

Frugality is decidedly the most predominant characteristic of the Indian attitude to money.

Money matters, money mantra, moolah mill…these are terms that seem to be uppermost on everybody’s mind these days, more so than ever before, and I am no exception. We are living in times that resemble a labyrinthine maze, at the centre of which is the Money Minotaur   a mythological figure that is half man-half bull, interestingly!) that must be tamed by fair means or foul. However, the Indian attitude to money is influenced by certain aspects of culture.

This attitude is basically governed by the fact that India is perceived by both people inside and outside as a poor country, we grow up seeing poverty all around us. Naked, hungry children roaming the streets, poor, homeless people begging, are all a common sight in almost any city. An astounding one third of their population is below the poverty line, two thirds are middle to upper class, and .001% of the whole population consists of high net-worth individuals [HNI’s]. This general atmosphere of gloom kind of puts a fear of sorts towards money and wealth in our minds, fear in the sense of wanting to protect what we have, of an undue concern for the so called ‘rainy day’. I'm mainly talking of middle class working Indians here-the class to which I belong and therefore know well. Most middle class Indians live by this. This does not mean that other cultures don't want to protect their money, but Indians take it to a whole other level. Budgeting, saving and all are very important values that are instilled in Indian kids growing up from very early on. I have often wondered, if the West is more obsessed with money or are we Indians more obsessed? My exposure to the West has been in brief snatches and may be called second hand at best although throughout my professional life I have had to deal with foreigners, people from Europe, in particular. The only Americans I know are Indian Americans who are in any case a hybrid of their Indian roots and their American circumstances. In my experience many Indians who live abroad, even though are well-off financially, are still dedicated to save every dime, and have heard that Indians usually get termed as misers or stingy. But this all hearsay, so I really cannot tell.

The practice of frugality implies that one should try to stay within his/ her means. However, the term Indian does not refer to a monolith. There are of course regional variations to the general attitude to money. For instance, in Bengal, the state I hail from, the pursuit of money is considered somewhat evil. The general aim is to make enough money to make ends meet and nothing beyond. If you happen to be an exception to that rule then society takes a second look at you and you generally become the subject of discussion. This probably is not true for Indians hailing from states such Gujarat and Rajasthan where generally the risk appetite is more and therefore business is seen as a viable means to making money that is not just enough but much more than that or in UP, Punjab and Haryana, where the show of opulence is more than evident at weddings etc. In the southern states where I have been living for the past few years, I see a caste-driven attitude to money. The Brahmins are more cautious about money and generally look at well-paying jobs as the means for livelihood, whereas other castes have more access to inheritance in terms of real estate and gold. But on the whole the Indian attitude to money is that it is scarce and therefore to be protected.

Another reason why Indians focus on saving so much is culturally they have obligations to fulfill, towards their parents and kids. It's not just limited to raising kids and providing for their needs, in most middle class households, it means that parents must fully fund their kids' education, no matter how expensive, and their weddings. In addition they may have to look after their aging parents, provide money for their needs, and fund illnesses if any as the concept of proper insurance is yet to catch up in India.

Now, why is it that Indians have a cultural obligation towards providing for their kids and parents? Traditionally, Indians lived in joint families, where brothers and their wives and their kids and their parents all lived together as one unit, where individual incomes and wealth were pooled together and combined as the family’s wealth. It then got distributed down to the next generation.  Even  though in modern times, the joint family is all but gone, the mentality does still continue, of the wealth being that of the family, and not just the individual, this even though most of the people have self-earned wealth and very little to nothing that's inherited . Indian parents continue to think that everything they have belongs to their children eventually, and the children have a right over it. Parents consider expenses such as education, wedding, even housing for their children as their responsibility. It's not an uncommon thing for some parents to buy a piece of property or house for their kids, when they get married, in fact some parents do so to be modern, or show that they are broad -minded, insofar as they don't expect their son and his new wife, to move in with them, and are okay with them setting up their own separate household.

I know people who have taken loans for their kids’ education.  Children taking a student loan on their own is unheard of, except in some cases, where the kids go abroad to study, and know they'll be making good money after graduating, enough to pay off the loan soon . But for exposure to other cultures, I really would never have realized that there are countries/cultures in the world where parents do not have to pay for everything. Whereas earlier I looked at it from an angle that, people choose to have kids, so they should pay for them, now, I too see the drawbacks in the practice and have tried sharing my perspective on this issue [that children, once they are young adults, should be able to fund their own education, set up their own establishment and move out, and in so doing become more responsible individuals, etc] only to be told that they are too radical and therefore not applicable in India. I do however, see some change in the attitudes of my contemporaries, so slowly but surely there is a shift in mindset occurring, whether it will be enough to raise a generation of Indians who don't run to mom/dad for money issues...only time will tell. 

14 Comments

  • Rajpriya
    By
    Rajpriya
    29.11.12 11:50 AM
    @Olga Shah,

    After reading the heart breaking story I thought you need help. If you only start refurbishing the the trashed furniture your husband brings home you could have a great business.

    Call your business Antique Furniture Co.
    Multimillionaires always pay huge prices for Antiques. An Idea can change your Life.
  • Rajpriya
    By
    Rajpriya
    29.11.12 10:02 AM
    @Olga Shah,

    That's shocking news. I hope he's not feeding and clothing you with food and clothes from trash cans. High time you first bash him and then trash him.

    One last thing to remember. Get his signature on his last will.
  • olga shah
    By
    olga shah
    29.11.12 03:17 AM
    My husband - Indian, and ohhh my god ...how not only stingy, he is ugly greedy for money, penny-pinching on everything although he is really wealthy...he is even not shamed to bring trashed furniture from street! and all of this with his monthly income about 20000$ !!! So guys everyone Indian so greedy ?
  • Stuti
    By
    Stuti
    18.05.12 02:31 PM
    To think about children or parents and plan something for them is not responsibility or compulsion. America has the culture of Individualism, Indians do not have it.
    Also, Indian Government does not give free medication and so, every Indian has to save for those days when one might have physical problems.

    BTW Indians are not obsessed with money, as they don't do anything and everything for Money and Power. Though we cannot take anything generalize, American people believe in individualism and so, their children become independent at 16 or 18. Also, it is not only about financial support that parents give to their children, but emotional support as well, as Indians believe in living life facing days together instead of bequeathing each other to face it.
  • Stuti
    By
    Stuti
    18.05.12 12:55 PM
    @Frida, I understand your feelings, but do not generalize looking at just one man. Do visit India. Every culture has its own plus and minus, it depends on us how and what we take. India has culture...and you might like it. Just give it a try. And not all men are like that :)
  • Frida
    By
    Frida
    07.04.12 01:57 PM
    Hi thanks for your article

    Unfortunately I just had a negative experience traveling with an Indian American young male. He constantly talked about how he didn't care about money but rather experience but "nickel and dimmed" me for every expense on the trip even if it wasn't mine. He also acted quite snooty and spoke condescendingly to me (female) So I was wondering if these are typical male Indian American traits or if he is just a jerk. I wanted to go to India to study yoga but he really gave me a bad impression of how men treat women in Indian culture. Im not making generalizations, but I had a bad experience.
  • The Atheist Indian
    By
    The Atheist Indian
    29.03.12 01:49 PM
    Interesting article. I think a large part of the thriftiness in among Indians, especially the working class living in the country comes from the fact that they have much smaller incomes than they do in western countries. Purchasing power parity never tells the full story since a lot of things which are necessities in the west (like electricity, petrol, etc.) are considered a luxury in India and taxed accordingly. Income to basic expenses ratio is far smaller in India than in those countries where Indians seem 'cheap'.

    Now coming to the subject of loans. When I tried to get a loan for my pilot training, it was pretty much impossible. I was self reliant then, running a web based business but apparently that wasn't good enough for Indian banks. You have to show that you are still in your parent's good books and they have money. Finally I had to swallow my pride of self reliance and ask my parents for money (even though, I was financially independant by then, but just couldn't afford the fees of flying lessons on my own).

    This again, brings us back to the subject of being stingy. My first job, after completing the required hours was at a charter airline, flying Beech King Air. They paid a salary that just about covered my house rent, utility bills and food. I actually had to ask my parents again, for money to buy clothes and other basic needs. For other people who thought that every pilot earned mega bucks, my frugality would have looked miserly but only I knew what I was going through.
  • Meera
    By
    Meera
    22.03.12 04:12 AM
    Thank God India does not have insurance. Living in the US, our lives are running around terms like deductibles and co-insurances and by the time we figure it out, we realize we end up paying an arm and a leg. Insurance has just made healthcare expensive and out of reach for the common man.
    That aside, I think being frugal is way better than being spendthrift. From an NRI perspective, I notice that Americans hardly save for a rainy day. It does help to live for the day but I would be comfortable knowing that I have stash for my retirement or emergencies.
  • Shai
    By
    Shai
    21.03.12 04:26 AM
    Interesting article. One the things that always annoys me is how in Indian culture, the sole marker of success is money. Yes, its important to have money, but it shouldn't be the one goal to yearn for.
  • Vipin
    By
    Vipin
    20.03.12 10:38 PM
    Sushmitaji - enjoyed reading your article - altho found myself having to grasp quite a few different topics within the subject of money - talking about cultural differences, may I point you towards an article from the London Financial Times - http://www.ft.com/cms/s/0/5d8aaa3e-6e9c-11e1-a82d-00144feab49a.html#axzz1pg52MA5l
    The article talks about how parents in the UK are funding their children's needs: education, housing, etc. etc in these recession times.
  • shirish patwa
    By
    shirish patwa
    20.03.12 03:44 PM
    Madam Susmita,I do agree with your analysis of Indian culture and all that but find your prescription unpalatable.We read in newspaper how President Obama is beseeching the local industrialists to employ Americans in various professions where certain skill is required.The Americans do not afford to opt for higher education because ,unlike Indians and Chinese,their parents do not fund their education and living expenses after sons and daughters cross 18 years of age.Apart from financial aspect,since they are not under the watchful eyes of their parents,they stretch their freedom too much to create most of the social problems they are facing now.
    Another important point is that thriftiness is not misery.It is a boon that creates capital for the nation to progress.I laud the habit of saving and thrift because it not only creates capital but also frittering habit lands young generation in undesirable habits.
  • Apurva
    By
    Apurva
    20.03.12 02:54 PM
    seldom do kids take a loan to fund their education, a minute fraction maybe, parents love to really spoil kids by sending them overseas to study, to me its a form of showin off, taking a loan that does not capitalize into anything, eventually the kids come back, it would have been much better if they sent their kids on a vacation or took one themselves.........
  • Roy
    By
    Roy
    20.03.12 10:47 AM
    And yes Nice writing, you are right about the NRIs but I m a spendthrift I don't know how to save so I leave it to my dad. He manage my finances. Just another reason to love our joint family culture.
  • Roy
    By
    Roy
    20.03.12 10:43 AM
    I don't see any problem in parents taking care of children. This is coz of closeness in the family. I was myself dependent on my father till 25 but now I m supporting him. I m taking care of younger brother and sister's education and we are planning future investment for family together like u explained in article. I like our style more than western culture where right from young age youth start worrying about their bills. I won't leave my family just bcoz they have insurance. I love to live with them and I like to TC of my younger bro and sis.

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