What did I learn from Indian Spending patterns?: Lessons for Financial Success

Are you prepared to explore the realm of Indian spending patterns and unearth valuable insights? Having resided in Canada since 2018, I bring with me my firsthand experiences of being born and raised in India. Through careful observation, I have identified distinct trends and practices that have enabled me to save money and steer clear of unnecessary debts.

In this article, I aim to illuminate the financial wisdom inherent in Indian culture and demonstrate how individuals from diverse backgrounds can reap its benefits.

Unlocking the Power of Indian Spending Patterns

1. Inbuilt savings mentality and avoiding unnecessary expenses:

In Indian households, a time-honored tradition of imparting money management skills across generations has taken root. The deeply ingrained savings mentality among Indians motivates them to place a high value on financial security, refrain from indulging in excessive expenses, and adopt responsible budgeting practices. This mindset finds its origins in the nation’s modest per capita income, which has fostered a culture of diligently monitoring expenses and optimizing savings.

As an Indian with an inherent savings mindset, I carefully assess the potential impact of each purchase on my life. I ask myself questions like, “Will it enhance my productivity?” or “Will it improve my living environment and well-being?” If the answers align positively, I wholeheartedly make the purchase. However, I’ve also had my fair share of regrettable purchases, fortunately, they were not costly!

Takeaways:

• Embrace the art of budgeting, tracking expenses, and resisting impulse purchases to navigate your own path to financial success.
• While frugality is vital, it’s essential to strike a balance, as excessive austerity may compromise our standard of living.
• Learn how efficient financial planning and strategic spending can enable us to enjoy a comfortable lifestyle without sacrificing our savings, a valuable lesson that transcends borders.

2. Value for money:

Indians are renowned for their discerning approach to shopping, always on the lookout for products and services that offer exceptional quality at reasonable prices. With a penchant for thorough research and careful consideration of value for money, they make informed decisions that align with their preferences

Takeaways:

• Discover how conducting thorough research, comparing prices, and seeking value for money can empower you to make informed purchasing decisions while avoiding overspending on items that fail to deliver long-term value.

Let’s delve into an example: I recently acquired a magnetic meal planner from a local Dollarama store (similar to Dollar Tree in the USA). Surprisingly, the same item was priced at CAD 14 on Amazon, but I snagged it for just CAD 4 at Dollarama.

• However, it’s important to note that not all products can be approached with the same strategy. In pursuit of lower prices, we sometimes sacrifice durability. Take, for instance, a toy storage box I purchased from the same store. Unfortunately, it didn’t last long.

In summary, arming yourself with a basic understanding of average prices and knowing where to find high-quality products at affordable prices can be the key to smart shopping.

3. Less Usage of Credit Cards/ Conservative approach towards debt:

Credit card usage in India has been growing steadily in recent years, but it is still relatively lower compared to some other countries. In a way, it is beneficial and helps control overspending and contribute towards savings or reaching financial goals faster, but there are some negative aspects to be considered which Indians who are not using Credit cards are probably missing out. One such notable advantage of using credit cards is rewards programs, cashback incentives, or travel perks. These rewards can provide additional value for your spending, such as discounts, or points.

Let me share an anecdote about my brother-in-law’s travel experience. Thanks to a credit card reward program, he recently enjoyed the luxury of free airport lounge access during his journey from India to Canada.

Typically, I stick to using a single credit card and prioritize timely payments. I make an effort to minimize my reliance on credit cards whenever I can. Although I recently switched to a different card with better rewards, I remain cautious not to be swayed solely by these programs. Ultimately, I maintain my focus on responsibly managing and utilizing just one credit card.

Takeaways:

Responsible and minimal usage of credit cards can slow down overspending maximizing rewards.

4. Reusing, Repurposing & Mindful consumption:

Indians have a long-standing tradition of reusing, repurposing, and recycling items. This is applicable to several areas, but for now, let’s take dresses as an example. Dresses and garments are often reused or repurposed in various ways to maximize their lifespan and minimize waste. Even now in rural areas, people buy new dresses only during some festive seasons.

I have a habit of maximizing the lifespan of my clothes. When they start to fade a little, I repurpose them as casual wear. As a result, I rarely need to purchase casual clothing. Additionally, my daughter receives a generous amount of dresses from our relatives. We prioritize simplicity and avoid spending a significant amount of money on expensive clothing.

Takeaways:

Some cloth-reusing strategies followed by Indians are mentioned below. To a large extent, people in other countries can also reap the benefits of adopting a few or all of these techniques:

• Hand-me-downs: Passing down dresses to families or friends is a common practice in India. When children outgrow their clothes, they are often given to younger siblings, cousins, or other relatives. This allows garments to be used by multiple individuals over time.
• Donations: Dresses in good condition that are no longer needed are often donated to charitable organizations, NGOs, or orphanages. These organizations distribute the clothes to those in need or sell them at affordable prices. Donating clothes ensures they are reused by someone who can benefit from them.

This is probably a popular tradition in Canada. It’s generally easy to donate clothes/toys/ small furniture etc. I usually drop them in donation boxes of Diabetes Canada or hand them over to local thrift stores.

• Secondhand markets: India has a thriving secondhand clothing market. Clothes that are in good condition but no longer needed by their original owners are sold in local markets or street bazaars. These garments find new owners who can purchase them at lower prices, contributing to a circular economy of clothing reuse.
• Upcycling and alteration: Garments that are worn out or no longer in fashion are often repurposed through upcycling or alteration. Skilled tailors or artisans transform old dresses into new designs, such as creating patchwork quilts, pillow covers, bags, or accessories. This process breathes new life into the fabric, reducing waste and promoting creativity.

In conclusion, Indian spending and financial planning offer numerous valuable lessons that can benefit individuals worldwide. However, it is crucial to approach these practices with a balanced perspective, considering both their advantages and potential downsides. While Indians demonstrate a strong savings mentality and a discerning approach to value for money, certain financial practices in India can be detrimental. Overreliance on informal borrowing channels, neglecting insurance coverage, and lacking investment diversification poses risks to individuals’ financial well-being. By being aware of these pitfalls and promoting responsible financial management, individuals can incorporate the best of Indian wisdom while avoiding potential pitfalls, ultimately achieving greater financial success.