The Savings Myth: How savings need to be done
Ram a Middle -Aged Man in his 40s has faced the savings myth efficiently unlike his counterparts, he is in a position of quitting his job whenever he wants to. On the other hand, his counterpart Bheema is struggling with his finances, his situation is quite opposite to that of Ram. Interestingly Both were childhood friends who took the same course in college and eventually same career. Bheema’s parents are worried about their son’s financial position, both parents always discuss why Bheema isn’t well in his finances though he copies Ram in every step of his life who is well in finances.
After a few days, while Ram walking on the road encounters a bank staff, he pleads with Ram to deposit money in their bank. Bheema coming in the same direction goes unnoticed by Ram but falls in the eyes of Bank staff, he abuses him in whatever way he can, but Bheema stands quietly. Ram stops the bank staff and enquires. He complains that Bheema hasn’t been paying the interest or principal amount of the loan he took from the bank. Ram is shocked to see Bheema in that situation.
Unable to look at his friend’s sufferings he assures the bank staff that he will pay the loan on behalf of Bheema and informs that they are childhood friends. Bank staff leaves the place as he trusts Ram, also known as the Master of “Savings Myth” in the city.
Bheema: Why did you save me? Anyhow I am going to be arrested within a few days
Ram: For not paying back, right?
Ram: I will pay all your loans, no need to go to jail
Bheema: Do you know the principal amount I need to pay?
Ram: Twenty lakhs, am I correct?
Bheema: How do you know?
Ram: Do not worry about it, the master of the “savings myth” is with you
Bheema: What is that?
Ram: Before that tell me what you do with your income.
Bheema: paying loans and purchasing essentials
Ram: What you have been doing for the past 20 years?
Bheema: I was saving and spending
Ram: First saving or spending?
Bheema: spending and then saving
Ram: This is the mistake you made, you have to save(Must be a fixed percentage) and then you have to spend(remaining) not the otherwise. This is the formula I use and this is how I got the name Savings Myth Bheema: Both are the same, you are not a savings myth. Your belief is a myth in itself
Ram: That’s an Illusion, especially in the era of consumerism
Bheema: How come? I do purchase only what Is required
Ram: what are those requirements?
Bheema: Food grains, clothes, a car, a computer and a tab
Ram: Previous month?
Bheema: clothes etc.
Ram: Again clothes?
Bheema: Yes, I need to go to the office, people respect those who wear new clothes
Ram: This is an illusion. Making new Purchases, even if the old items are fine is not a necessity. It is called as “wants”
Bheema: What? I think by eating others’ heads you have got this name “savings myth” (says in a frustrated tone)
Ram: Needs are what you want to run your life smoothly whereas wants are to please others, in other words, show off
Bheema: No both are the same
Ram: If you do not understand what I mean, you have to do it practically. Take this money and follow my Instructions.
Bheema: First save and then spend?
Ram: Yes, it is only for the first month and the following month as you normally do
After two months……..
Ram knows what Bheema is going to tell him. On the other hand, Bheema is excited he runs towards Ram as he came to him in his school days. He is breathing heavily and hardly able to speak.
Ram: sit and relax
Bheema: Your formula worked, savings myth
Ram: of course that’s not mine I learnt it
Bheema: I saved 30,000 out of 40,000 and in the next month I saved only 5000 out of 40,000
Ram: Follow this you will live happily post-retirement
Bheema: You made my family happy they want to see you, please come to my home
Ram: Another day definitely
Bheema: Ok bye
1. What is the formula of savings?
The formula of savings is Income-savings(must be fixed percentage) = Expenditure, not the otherwise
2. What do you mean by savings myth?
It is the misconception of people that the definition of savings is Income- Expenditure = Savings