Financial problems at a glance.

When it comes to psychology and financial behavior, India does not have too much of research papers. Hence we are forced to turn to the US or UK for such research work.
US studies have summarized financial problems and have found the following to be the most common of financial problems:

~ Not planning: The single biggest problem for most people is that they just do not plan their finances. It just keeps coming and going. Even if they are not happy about the results of what they have done so far, they do not change the way things are done.

~ Overspending: Many people with not very high incomes have very high ambitions. This is likely to get them to grief. Most of this problem is because the salesmen in most shops do not tell you the price of a product, they only tell you the EMI -- so anything from a plasma TV to a luxury home on the outskirts of the city are made to look cheap! After all at Rs 2,899 a month does a plasma TV not look cheap?

~ Not talking finance at home: Children are kept away from the finance topics at the dining table. Finance is perhaps the second most taboo topic at home! So many children grow up without knowing how much of sacrifice their parents have gone through to educate them.

~ Parents spending on education and marriage: There are just too many kids out there who believe that they need to worry about savings, investment and life insurance only at the age of 32 plus. This means your father, father or a bank loan has funded your education and marriage. Kids should take on financial responsibility at a much younger age than what is happening currently.

~ Marriage between financially incompatible people: Most marriages under stress are actually under financial stress. Either the husband or the wife is from a rich background and the other partner cannot understand or cope with the spending pattern. It is necessary to match people financially before marriage.

~ Delaying saving for retirement: "I am only 27 years old why should I think of retirement" seems to be a very valid refrain for many 32 year olds! Every year that you delay in investing the greater the amount that you will have to save later in your life. Till the age of 32 it might be feasible for you to catch up, but after some time the amount that you need to save for retirement just flies away.

~ Very little life insurance: With all the risks of life styles, travel, etc. illness and premature death are common. We all have classmates who had heart attack at the age of 32 but still pretend that we do not need life or medical insurance. We buy car insurance because it is forced upon us, but we ignore life insurance! Imagine insuring a Rs 10 lakhs car, but not insuring (or under insuring) the person who is using the car -- and paying for it, that is, you!

~ Not prepared for medical emergencies: Normally big emergencies -- financially speaking -- are medical emergencies. Being unprepared for them -- by not having an emergency fund is quite common. Emergency fund has now come to mean the credit card -- which is good news for the bank, not for the borrower.

~ Lack of asset allocation: Risk is not a new concept. However, it is a difficult concept to understand. For example when the Sensex was 3k there was much less risk in the equity markets than there is today. However at 3k index people were afraid of the market. Now everybody and his aunt wants to be in the equity market -- and there are enough advisors who keep saying, "Equity returns are superior to debt returns." This is true with a rider -- in the long run. It is convenient for the relationship manager to forget the rider. So there could be a much larger allocation to equity at higher prices -- to make for the time missed out earlier.?

~ Falling prey to financial pitches: The quality of pitches has improved! Aggressive young kids are recruited by brokerage houses, banks, mutual funds, life insurance companies, etc. and all these kids are selling mutual funds, life insurance, portfolio management schemes, structured products, et al. Selling to their kith and kin helps these kids keep their jobs, and there is happiness all around! These kids, themselves prey to financial pitches, have now made it an art when they are selling to their own natural 'circle of friends' and relatives.

~ Buying financial products from 'obligated persons': This is perhaps one of the worst things you can do in your financial life. A friend, relative, neighbor, colleague who has been doing something else suddenly becomes a financial guru because they have become an agent! They, in great enthusiasm, sell you a financial product and promptly in 2 years time give up this 'business' because it is too difficult. You are saddled with a dud product for life! What a pity. Charity begins at home, not financial planning.

~ Financial illiteracy: Most people do not wish to know or learn about financial products. They simply ask, "Where do I have to sign" -- so buying a mutual fund is easier than buying life insurance! Selecting products based on the ease and simplicity of buying is a shocking but true real life experience in the financial behavior of the rational human being!

~ Ignoring small numbers for too long: What difference will it make if I save Rs 1,000 a month? Well over a long period it could make you a millionaire! So start early and invest wisely. It will make you rich. That is the power of compounding.

~ Urgent vs important: Most expenses, which look urgent, are perhaps not so important -- the shirt or shoe at a sale. That luxury item which was being offered at 30 per cent discount is such an example. These small leakages are all reducing the amount of money you will have for the bigger things like education or retirement.

~ Focusing too much on money: Money is no longer a commodity to buy things. It is a scorecard of one's life. That will cause stress, and yoga might help. However if you will seek a branded yoga teacher -- so that your friends think you have arrived, yoga it self could cause financial stress!

I was annoyed a number of times by the site on another person shouting in to his cell phone, form being an invention that has revolutionized communication it has become a much abused tool in the hands of common man.

Cell-phone etiquette is really just common courtesy. Most people today have a Mobile phone. In fact, many people can't imagine how they ever got along without a portable phone. However, many people also complain about cell phone users. I have seen people complain about other people loudly discussing personal matters in public places. They complain when cell phones ring in movie theaters and places of worship. They complain about people driving too slow, and not paying attention to where they are going because they are talking on a cell phone. And they complain about people walking around talking to people who aren't there.

Whenever a new communications technology becomes popular, it changes the way society is organized. Society has to invent rules for the polite way to use the new devices. Our social etiquette, our rules of politeness for cell phones, is still evolving.
Cell-phone etiquette applies to most public places. Always try to keep your phone ringer as low as possible or put your mobile phone on vibrate, so it does not distract the people around you. A good time to leave your phone at home, or at least in the car, would be at a funeral, wedding or some event along those lines. Once I went to a funeral of an elderly man, his son was busy talking to some one over the phone and we were all waiting for him to light the funeral pyre
I tried to coin some Basic Cell phone etiquette rules, please feel free to add some thing on your part.


01. Know when to switch off

You must know when to turn it off or vibrate it. Example meetings, movies, worship, seminars, etc. Vibrate mode when in places where you can take a call, but don't want to disturb others.




02. Ask Permission

You can not see a person being called, may be he must be driving or be in an important meeting so it is better to ask for permission to speak, even he/she may be an intimate friend this rule should apply.


03. Keep it short and Simple (KISS)

When you get a call and you're with friends, keep the call short.




04. Politeness

Don't scream: speak in a lower-than-normal voice, you will be heard by the caller, and not others in the room. Avoid talking where you may be distracting to others.



05. Driving

It kills, like alcohol using mobile phone while driving kills. It is not only very dangerous, but also unlawful in most countries (even India) to drive & talk on your cell Phone


06. Do one thing at a time

Multi-tasking is not cool and you can't really do it properly and safely anyway. Pay attention to what you are doing as multi-tasking can be hazardous, rude and inefficient. The person you are talking to deserves your full attention.

07. Respect camera phone rules

Respect others' privacy and do not use in-phone cameras anywhere a normal camera would be considered inappropriate, such as in art galleries, change rooms or toilets. Ask for permission before you take someone's picture. Some venues do not allow the use of cameras and may refuse entry to anyone with one.