DEBT WEDS SAVINGS PART: 4

WILL THE WEDDING LEAD TO HAPPY MARRIAGE

DEBT is loaning money when one doesn’t have enough, whereas SAVING is putting aside a part of Income for emergency/future use.

How can these two get along? To understand this, let’s deep-dive into what is Marriage?! While some culture sees it as a Gift from God, some others see it as a duty to raise the family for religion to grow. People also see it as union of two families/individuals.

In a very old culture Wedding Ceremony is the starting point of marriage between Man & Women, to start their family on following “Four Life Principles”

1. DHARMA: Moral values & Righteousness, phenomena which governs all life in Universe especially including you & your family.

2. ARTHA: Economic Values & prosperity. which is more towards specific context. It is the means for living life and provide financial security for family

3. KAMA: The real meaning is desire to follow the first two apart from the worldly pleasure and more importantly on 4th aspect “Moksha”

4. MOKSHA: It is “Desire to Kill All Desires”. “Attaining a state of Fulfilment”

As we have moved from LOCAL to GLOBAL, we have mixed bag of principles for wedding.

Self-interest is above Family Security; We try to find the loop-holes to escape responsibility. There is very less coordination.. Husbands hate wife and children; Wife doesn’t like husband’s parents; Sending children in a grade oriented school is not enough. It only creates competition without understanding rules of the life. We just don’t teach them about Personal finance and responsibility. Everyone in the family instead of working for a common cause, they work on personal agenda, self-supremacy & use blame-games to establish their position. In the same way, DEBT & SAVINGS will pull the prosperity down, if we don’t use them in conjunction.

Now let me ask a question, “Why one is borrowing to have burden of DEBT?” Is for getting away from old debt or for a new cause & if this type of situation crops up frequently, then Savings will find it difficult to feed the growing debts and will stop its duty as interest will eat away all the money one can save.

On other hand, if the savings are very meagre after all the spending, paying instalment, then prosperity & happiness will only be a distant dream. Again, if the savings is not deployed to earn interest more than inflation, it will lose its value, So how to set this marriage between DEBT & SAVINGS to follow certain principles

You would have come across cases where the family has managed the Low-Income issue by starting a small home business by taking a loan and starting things like catering, tailoring and eldest child starting a private tuition in the evening. A family, taking a car lease through a loan & husband, sons working as a part time driver after their factory shifts to repay the loan & even owning a new taxi.

The rules of this wedding should be

1. Debt to Income ratio should be maintained lower than Savings rate

2. Debts are okay, if they are meant for creating wealth & your savings can handle the debt.

3. Savings are of no use, if you don’t deploy them to get returns, atleast better than inflation

4. If saving can manage debt-instalments and the opportunity to create economic value is promising through a new business is indeed good.

So “DEBT & SAVINGS” are not opposing forces, they can get along well to create Financial Security & Financial Freedom