Mothers as money managers; lockdown underlines the message

This lockdown covers India and large swathes of the world. But this lockdown also helps us put Mother’s Day in the right perspective

May 08, 2020 08:05 IST India Infoline News Service

When the COVID-19 lockdown got extended for the third time, Rohit Patel was indignant. He protested, “How does the government imagine that we can run our work and business by merely sitting at home”. His 72 year old mother, however, had an epic response. “Son, I have been managing things sitting inside the house for the last 45 years, and you are getting irritated in 45 days”?

Year 2020 will go down as the first time in memory that International Mother’s Day (10th May) will be celebrated in the midst of a massive lockdown. This lockdown covers India and large swathes of the world. But this lockdown also helps us put Mother’s Day in the right perspective. It serves to remind how effective mothers have been managing the economics of the home despite operating in a limited environment. Here are six things that this particular Mother’s Day reminds us about our mothers.

How you operate is more important than where you operate
That is certainly one lesson this Mother’s Day reminds us in the midst of the lockdown. It is amazing how, like Rohit’s mother, most mothers have managed to take important decisions for the household from a very limited world view. Mothers have been extremely smart learners and have managed to get insights from within the family itself. That has enabled them to take well calibrated decisions despite not having the exposure that the males in the family had. This Mother’s Day falling in the midst of the lockdown is a stark reminder that how we operate is a lot more material than where we operate from.

Keep some savings for a rainy day
Most mothers won’t tell you, but they have a target savings approach. For example, some women of the house make it a point to put away a portion of the household expenses in an emergency fund. Some mothers go a little further and even manage to create a small emergency fund out of the bargains they eke out from shopkeepers.  Even the proceeds of sale of any redundant household asset go into an emergency fund. There are two lessons for us to recollect on Mother’s Day. How much you save matters a lot more than how much you earn. Secondly, it makes more sense to treat savings as a target than a residual item.

Don’t get into debt; and if you do then get out quickly
This lesson has been really driven hard by the lockdown. With income flows halting or reducing, EMIs and credit card bills are starting to pinch. Of course, the banks are offering deferral of EMIs but that is only postponing your problem. You need to pay a larger amount after 3-4 months. Mothers dealt with debt differently in the good old days. First and foremost debt was a strict no. They would rather do without a luxury or even a comfort if it entailed any form of debt. Any debt, including debt from family members, had to be repaid immediately. That lesson would have really stood all of us in good stead in the midst of the COVID-19 lockdown. More so, at a time when household debt is at a high in India!

Best financial plans are for the really long term
Long before financial planning became a distinct discipline in India, mothers were already planning for long term requirements. Of course, back then the focus would be entirely on the daughter’s wedding, but the planning would start pretty early. For example, the accumulation of small sovereigns of gold would start from the time the girl child was born. Festivals and celebrations were time to buy gold for the girl child. In a way, that was the pristine form of SIP because it gave the benefit of gradual accumulation and rupee cost averaging.

Magnifying achievements through proper budgeting
In most Indian households in the past, the mothers handled the household budgets. Everything down to additional stationery had to be budgeted and approved. Any expenditure other than the routine grocery and school bills had to be put up, justified and approved. Discretionary spending was kept at the bare minimum but that allowed mothers to maintain a tight leash over the budget. This was made possible only through detailed budgeting.

Cut your coat according to your cloth
This is perhaps the bonus takeaway. The above chart best captures the way Indian household consumer debt has grown in the last 4 years. Per capita personal loans are up twice and credit card loans are up almost 2.8 times. One thing mothers taught us all along is to cut the coat according to the cloth and live within our means. This Mothers Day as we spend under lockdown, it is time to ponder over this all important lesson from mothers.  

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