Dear Friends,
During my schooling, I owed 25 paise (1/4 of a rupee, as they are no longer in circulation) to one of my friends. I did not know Anas (1/16 of a rupee). My parents were using it. Now, our next generation is not aware of 5 paise, 10 paise, 25 paise, 50 paise, etc. However, the debt I owed constantly haunted me until I repaid him. In similar incidents, if someone owed me any paise, I used to constantly remind them until they repaid me.
I am not a financial expert or planner. I did not anchor for the best opportunities to earn during the peak of my career either. I restarted from scratch in my mid-30s, experimenting with new skills, a new profession, and a new place.
When I resigned from my job, I did not have a good bank balance, but I ensured I cleared all my loans in full. I ensured that no new loans were taken; even when taken, they were limited to my small earnings. Thanks to my mother’s childhood training, psychologically, I am scared of EMIs.
You might be wondering about the context of my story here. Recently, I was buying some items in a shop. I overheard a conversation between two salesgirls. They were discussing EMIs. One of them took a mobile on EMI without telling her parents. Now, the loan app agents were psychologically blackmailing her. It is not one single story. Many Gen Z kids are on the same EMI path — some for mobiles, some for flats, some for luxurious villas, some for international trips, some for posh furniture — and the laundry list goes on.
A few days back, there was an issue in Bengaluru. I was reading about this incident on Facebook. A Bengaluru professional lost his job and missed three EMIs on his home loan. Under the SARFAESI Act, the bank auctioned his ₹1.2 crore flat at a distress price of ₹95 lakh, recovering ₹80 lakh and leaving him with just ₹15 lakh. Beyond the direct capital loss, he also lost eight years of EMIs, interest paid, registration costs, and the opportunity his invested money could have earned elsewhere. What vanished was not just a house, but accumulated equity, financial stability, and future wealth potential. In my view, a rough estimate of the loss could be more than ₹1 crore.
Here are my assumptions — Direct equity loss ₹25 lakh, Interest paid ₹50 lakh, Registration & miscellaneous ₹15 lakh, Opportunity cost gap ₹60 lakh. Total economic impact (broad view): ₹1.2 – ₹1.4 crore equivalent impact.
In my view, parents need to teach children not about how much more can be earned, but how much less they can live on. Frugality is real savings. Even if someone earns ₹50 lakh and the lifestyle cost is ₹60 lakh, the psychological cost is higher, often leading to health issues. AI is unpredictable. Many jobs are shaky. Do not take major buying decisions based on future money; rather, base them on past accumulation.
The former President, Abdul Kalam, left behind no personal wealth or property — only his personal belongings, including books, clothes, a veena, and a laptop. When I met him in person, I was truly inspired by his words and warmth. Why am I truly inspired in the first place? Because of his frugal lifestyle. Unfortunately, I am still struggling to live like that.
Frugality is not just personal finance — it is behavioral economics, resilience theory, sustainability, and intergenerational wealth strategy combined.
Ravi Saripalle
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