Last Updated on October 8, 2023 at 1:37 pm
A few years ago, I overheard some lab staff talking. A middle-aged person, soon to retire, was talking about the preparations for his daughter’s upcoming marriage. His aim was to outdo the reception arrangements he had observed in a recent marriage. I was invited to the event and found that it was extremely lavish for the income slab that the person belonged to.
More and more people around us want to blow up their net worth and their salaries on things that are disproportionately expensive.
Someone I know (who is not so well to do) hosts a lavish birthday party for their kid just so that she “fits in” better. Another has got a car because that is a sign of moving up the “status” ladder when the take-home pay after deduction of home loan EMI is barely enough to cover expenses.
It is not a “kids these days” problem. It cuts across age groups. Human beings have always gauged and benchmarked by how wealthy and how happy other people are, by the kind of clothes they wear, the vehicles they drive etc.
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What is the role played by social media here? Today we can connect with people we barely know and immediately get to know what they buy, where they eat out and holiday. Has this not made such “benchmarking” so much easier?
Has it now become easier to con ourselves into thinking that doing/buying certain things (we cannot afford) will make us happy/happier?
From what I see, it is the low-income group that wants to project itself as having the means to live the “good life”. They want the goodies that the middle-class can afford. The middle class want to “get ahead” themselves and so on.
No wonder that the gap between the rich and poor is getting wider with each passing day: The 80/20 rule: Making sense of richest 1% Indians owning 58% wealth!
I hate to state the obvious, our aspirations or how badly we want something must be proportional to our income. There is a big difference between wanting something and wanting something now.
If I earn only Rs. 20,000 a month, wanting to feel cool with an Apple iPhone 7 now is plain stupid. Not everyone can have everything in life. I put a small sum away each month and maybe after a few years, could afford an iPhone-7 or a second-hand iPhone-13.
If we don’t make enough (or at least the means to do so in future), we will have to settle. If we don’t have that maturity today, life will teach it to us the hard way tomorrow.
A thumb rule for common sense (duh!)
Suppose a family has an income of Rs. 40,000 a month. Mandatory monthly expenses in a metro should be about 50% of that. Assuming no loans, they would need at least 10-20% each month to finance their future (aka invest). So they can comfortably make instinctive purchases with anywhere between 5% -10% of the monthly income.
Any optional expense above 10% should be postponed and purchased only after enough has been accumulated each month – aka “delay gratification”.
“But what if I am never able to purchase it that way?”. “But what if the item becomes more and more expensive and I never catch up to it?”
Tough luck dude! Aim for less! Not everyone will get everything. We need to remind ourselves about this from time to time.
There is a perfect Tamil proverb to represent the title:
Viralukketha Veekkam
This means the swelling on a finger would be proportional to the size of the finger (the little finger would not (should not) swell as big as the thumb would (should)).
Can someone please let me know the English and Hindi equivalent?
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Dr M. Pattabiraman (PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over 14 years of experience publishing news analysis, research and financial product development. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free, AUM-independent investment advice. Connect with him via Twitter(X) LinkedIn YouTube Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (Published by CNBC TV18) for DIY investors. 
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Most investor problems stem from a lack of poor decision-making. We made bad decisions and money mistakes when we started earning, and we spent years undoing them. Why should our children go through the same pain? What is this book about? As parents, what if we had to groom one ability in our children that matters not only for money management and investing but for every aspect of life? My answer: Sound decision-making. So, in this book, we meet Chinchu, who is about to turn 10. The story follows what he wants for his birthday and how his parents plan it, while also teaching him key ideas about decision-making and money management. What readers say! 
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