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Effectively managing your economic life

Are we aware of our financial goals, investments and long term plans? Heard of mutual funds, equities, bonds or life insurance? No? Something similar happened with Sharma ji. You must be knowing him having been compared numerous times with his son. Yes! Sharma ji ka ladka. So anyways, Sharma ji died in a very suspicious manner (some neighbours are suspected) and didn’t have health insurance or long term money saved up for his family. I mean he had insurance for his cell phone which, by the way, he used for calling neighbours and boasting about his son, but no life insurance for his family. I guess there are a few things you don’t learn from reading books or scoring good marks.

In India, every parent’s major concern is to get their children married and think they have to spend every penny so that ‘Khatir Dari Mei kami na rah jaye’. Meanwhile, after one wedding, Indian parents are like:

But that’s not the worst part, researchers have found that 72% of the employees in workplaces had no idea about how to manage their retirement savings, as per a survey by ArthaYatra. India is still a developing country but the current level of unawareness about Financial Wellness is concerning for small scale companies as it affects the whole Economy, Financial Health of employees, and source of income for the family, which calls for an understanding of what it is, how it benefits small firms and owners and what can be done to practice it.

What is Financial Wellness? Let’s have a look

Raju: “Babu Bhaiya, apne acche din aa gaye.” (Golden days are here)

Babu Bhaiya: “Kyu, aisa kya hua hai?” (Why, what happened?)

Raju: “Babu bhaiya, Yeh Tata, Birla, aur Ambani ameer kaise bane, uska secret mujhe mil gaya hai.” (I know the secret of becoming as rich as Tata, Birla and Ambani)

Babu Bhaiya: “Unko 10-10 lottery ek sath laga?” (They won a lottery?)

Raju: “Arey nahi Babu Bhaiya lottery to gareeb logo ki scheme hai, bade log financial wellness mein invest karte hai.” (No, the lottery is a tricky business, rich people invest in Financial Wellness.)

Babu Bhaiya: “Deva re deva, ab ye Financial Wellness kya hai Raju?” (What is Financial Wellness?)

Raju: “Aisi scheme hai yeh jisme hume apne finance ka Dhyan rakhna hota hai, jaise Income kitni hai, kharcha-paani kitna hai, kitni savings hai taki aage jakar humari physical, mental aur emotional health barabar rahe our hum efficiently kam kar paye.” (It involves taking care of your income, expenditure and savings so that you don’t have to face financial stress in the future.)

Babu Bhaiya: “Wah re Raju, mere ko aaj tak lagta tha ki tu bilkul nalayak hai par tu samajhdaar nikla re.”

Raju: “Arey aage aur hai…yeh yeh article padho niche” (There’s more to it, scroll down to know more)

We all have dreams and high expectations to have unlimited cash flow, live in a big house and enjoy luxuries like expensive cars, iPhones, clothes, and go on holidays whenever we want, but we don’t have to sell our kidneys or get duped by fraud companies just like in Phir Hera Pheri.

All we have to do is become a part of this scheme called ‘Financial Wellness’ which involves learning, understanding and planning how to maximise our wellness so that it doesn’t put us in financial jeopardy which can lead to stress, sleep loss, anxiety, headaches/migraines, compromised immune systems, digestive issues, high blood pressure, etc. which further increases the chances of adopting unhealthy behaviors. Organisations should be educating their employees about the major elements associated with financial wellness listed below:

  1. Financial literacy

  2. Financial health and Long-Term plans

Financial Literacy

Financial Literacy is the capability to know the financial concepts and the information required to make decisions. It is about knowing how to generate, spend, invest and save money. But according to the report conducted by the Global Financial Literacy Excellence Center, the financial literacy rate of India is the lowest in comparison to other major emerging economies, due to lack of formal training and awareness which leads to wrong investments, setbacks in economic growth and on a personal level, affects mental, physical and social well-being.

You know how in our family all the adults are the torch bearer of all the finance related responsibility and knowledge. Well, let’s just say there are no age criteria for you to start learning about financial terms or for that fact, practicing some financial wellness anymore. You can learn about it even now by starting to set goals, wants and needs and having a family member involved in this process, who can take initiative to talk with their children about money and how to use it wisely.

Financial Health and Burden

“Financial stability stems from healthy financial habits. Financial health is actually a state of being as a result of the following: you are experiencing minimal or no financial stress; have a strong financial foundation and living within your means decently; having no high interest-bearing debt and you are on track to meet your long-term financial goals.”

I remember watching ‘Yeh Jawani hai Deewani' where Bunny always used this phrase ‘Paisa haath ka mail hai, isse bachana nahi udaana chahiye’ thinking how cool it was to enjoy life without caring about saving money. But now, as an adult, I realise that no one actually taught Bunny how to save and invest carefully because if he were a real-life character, he’d have ended up penniless on streets in his old age without financial security and health or life insurance. To avoid that kind of situation, you can start by recognising your short-term goals which involve emergency funds, rent payment, insurance or student loans, credit card debt payments, personal goods and Travel; and Long-term goals involving retirement fund, paying off a mortgage, starting a business and saving for a child’s college tuition. If you start planning now, you can avoid going through financial troubles that may affect your overall health and family relationships.

Here are a few ways you can practice being financially stress-free, such as

  • Regularly working on daily tasks and doing them more productively gives great outcomes. Contribute 1% towards your future everyday by setting goals and systems in your Financial Journal.

  • Measure the progress, and keep a track of achievements that helps motivate you to perform even better and get great opportunities.

  • Take an half-an hour out of your day to destress yourself with yoga and meditation.

  • Implementing proper time management and devoting time in the right direction will always help in the long run.

Your finances can spill over into every area of your life because if you’re not managing your money, your money will manage you. Your productivity and work performance could suffer when you worry about finances, and you’re left feeling unsatisfied with life. One of the important things in Financial Wellness is recognizing your financial conditions because when you realize that only you can construct your own life, you’re free to bring about changes in your circumstances or at least be prepared to deal with the worst situation.

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