Sustainability of Life Styles

COVID-19 has impacted many organizations quite badly which led to the layoffs of intensity that was never felt or heard before and that was never predicted even in Jan 2020. Just in four months’ time many things changed in the life cycle of human beings as well as corporate.

On daily basis we are seeing lot of professionals with 10 -20 years’ of experience also posting on various social media platforms or their respective pages on professional sites like LinkedIn that they have lost jobs and need immediate support and help from the contacts to take care of their families and other financial obligations. In few cases the posting reflecting the sad economic situation resulting from the job losses.

While loosing job is bad for any person that too in a peak earning stage which impacts both career and earnings, what is more bothering me is every one blaming covid for the misery but I feel Covid-19 is just an instance but nevertheless we were already moved to a different life style and sooner or later we were bound to face the consequences on economic front if not on health front. May be if COVID-19 did not occur now, then probably many of us would have took few more years to reach to explicit economic issues or would have got in to the economic credit card traps forever. Indians were never like this if one really look back in to the period till 2010 or 2015 but things changed so dramatically in the last 5 -10 years and this is what really affecting the people big time than the job loss. We can understand the loss of job by a new entrant in the job market then struggling on Financial side to some extent but not someone with years of corporate earnings history, So I am trying to make an attempt to highlight those things and trying to stress the need to change certain habits and life style issues going forward and which can safeguard all of us including those whose lost jobs in future to face any crisis particularly economic crisis. As a society we will be in a better shape to face the challenges that may arise due to pandemic like Covid 19.

Let’s look at the life style of people in general in India till few years back say till 2010 or 2015.

1.     After Graduation people use to move to a city in search of job or start doing something at native place.

2.     From the earnings (Salary or Business earnings), they try to spend as little as possible and save money for their future, their siblings education or other family needs.

3.     The savings used to be so substantial that many cases they used to be more than 50% of the earnings atleast till they get married. Post that too the savings were never below 35-40% of the earnings.

4.     The main focus was to save, accumulate the earnings and then with those earnings try to buy a house with no or very little component of loans.

5.     Its only after buying house, after funding the education of the kids and meeting other family needs, they would be thinking on buying something like four wheelers.

6.     Normally Loans are hated to avail. Rather most people used to feel insulted to avail loans even from public sector banks. Its once a life time events like Daughter’s marriage or construction of house people avail a very small amount of loan in complete secrecy in comparison to total outflow of funds.

7.     Over the entire career in corporate, most people would also be saving good amount in the form of Provident fund balance and once they get retired they use the same for post-retirement life.

8.     Every one used to carry the lunch boxes from home or go to home for lunch or eat in company canteens there by saving money and ensuring healthy food and healthy life.

9.     Visiting movies halls, going out for any entertainment activities used to be occasional in nature mostly linked to festive seasons.

10. Most employees will have earning sources outside their jobs. So there is no complete dependency on job and most used to live in joint families and the support of the entire family used to be available in any exceptional need.

11. Jobs were quite secured, once a person join a company normally he or she used to retire from that company only.

12. People were doing their own home tasks and probably walk in the nearby parks if they find time and thus keeping health status under control.

Post the Liberalization in 1991, slowly and steadily the habits and lifestyles of people started changing as more and more western impact started showing on Indian youngsters leading to;

a.      Moving to cities even for schools and colleges is the new norm incurring additional cost towards accommodation and food. Sometimes people move with families which led to further costs and travel to family head.

b.     Major part of the earnings are spent on daily needs like accommodation, dressing, Food.etc. Savings are quite negligible restricting only to the extent of saving Income tax impact.

c.      Weekly movies with families, Regular eat outs, weekly shopping in big shopping malls, International brand apparels, Expensive cars, Hotel food at office or Food from Food Delivery apps at Home & Office, Multiple vehicles in the family, Gyms for all family members became new norm.

d.     Most people used to depend on personal loans and Provident Fund withdrawals to fund the day to day life style as mentioned above under “C”. Loans and PF withdrawals are supplemented with Credit cards from various Banks. Most of this generation youngsters do have multiple credit cards and they rather talk of planning the usage of credit cards in such away they want to take advantage of credit period. But reality is quite different from planning and paying.

e.      Everyone will have house even before marriage where morethan 90% is funded by a Bank loan and the majority portion of rest 10% of the cost of the house is funded by the hand loans from friends. So typically the entire house is funded with loans with a negligible portion being from own resources.

f.       Foreign personal trips are regular in nature again funded by personal loans and only thing one get from it is photos for uploading on social media and show the world how luxurious they are leading life style. But when you talk to colleagues they explain how they funded the trip and what they are going through to repay amounts incurred towards such expensive trips.

g.     Late night workings, Till early morning parties, Eating out for weeks together became new norm. Most people even stopped having active kitchen at homes. This has increased the cost of living substantially and also impacting the health conditions negatively.

h.     Changing cars and Mobiles quite frequently irrespective of the need with new models is another status symbol in the society among the new age generation of people.

i.       Corporate Politics are so deep and job security is always a question mark in most cases.

With all the above , literally no savings on regular basis and everyone is eagerly waiting for the month end for the salary credit just to see the ECS mandates getting debited to the bank account towards loans and Credit card payment automatic mandates. Many times as mentioned above, the shortages were funded with additional personal loans. All these increased the anxiety in the life of each and every person.

The new life style post liberalization though increased the earnings of people on paper actually pushed people to more and more debt traps without any savings. So all these led an ordinary average employee in to debt trap increasing anxiety level and resulting health problems in general and specifically in situation like Covid-19. Most people who lost the jobs even in senior roles with multiyear experience also quite stressed and looking eagerly on how to face the challenges from here on in life and how to pay the so many monthly EMIs and even how to maintain the minimum life style .

So as illustrated above, there is a serious need to review the life styles and expenses and learn from the crisis and start reinventing our life styles and redraw the life closer to pre liberalized era. So let me summaries what need to be done atleast from here on assuming we all as a society able to come out the covid crisis and those who lost jobs will get sooner or later some better opportunities.

1. Give Importance to savings. Ensure you save significant amount of your earnings on monthly basis.

2. There is no need to please anybody outside your family. You need to please only people who will come to your rescue and who genuinely share your problems when you are in crisis like the current scenario.

3. Wear clothes that make you comfortable and not the clothes of international brands that satisfy your colleagues perception about you and make you financially poor.

4. Ensure all fixed assets like house and depreciating asset like car is bought with full self-earned money or with very low loan portion. Always remember life without loans make you to have a sound sleep compared to having all these with loans.

5. Carrying lunch boxes saves money and keep you healthy. When you run out of money or spoil your health, none of the colleagues who cheered for ordering on food apps will come forward to help you except posting ”GET WELL SOON” message on Facebook or sending similar message on Whatsapp. So start taking care of yourself and not bothering much about the perception of people around you. As long as you are more bothered about others perception, you will never able to do justice to yourself.

6. Have financial discipline in place. Having multiple credit cards is pain and it’s not an asset and it will not bring any social reputation. If you believe having more credit cards is a reputation please come out of that myth. If possible avoid credit card or have just one card for any unforeseen emergencies.

7. There are parents who send their kids for Pre Nursery by paying more than INR 5 Lakhs per annum. Always one need to remember to perform cost benefit analysis. Sending kids to schools which take higher amount of fee is not the measure or criteria to measure your child’s skill set. So never follow the neighbor, but look at your own financial position and look at the actual knowledge acquisition opportunity in various schools by your kid and then decide. Always live within the means and never stretch outside particularly if that is not a need but just to satisfy society or false prestige.

So its actually the new life style that has resulted most people ill-equipped to face the fall out of COVID 19 crisis. There is a real need to go back to certain old habits of our seniors in families and lead a much planned life style which takes care of exigencies like the current one.

Hope some of us revisit the life styles and always save for the rainy day. Hope we never completely again lead a life which is so linked to corporate earnings making it survival issue .

Cash in the King be it in corporate or in human life. One need to plan life in such a way that he always lead life with surplus money .As long as your net earnings are more than your net spend, you are able to constantly contribute towards savings month on month which over a period of time result in to solid fund to take care of emergencies or even for buying fixed assets or leading the retirement life.

 Note: Its only intended to highlight a issue which is impacting many people. There might be few people who are compelled to follow different habits and life style due to their own personal circumstances. So like every situation there are exceptions and this article too is be subject to such scenarios and persons.

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