“चारो तरफ ज्ञान बँट रहा हे,जहाँ से मिले लैपेट लो”  

This was a dialogue in 3 idiots – a brilliant movie that gave countless messages, one of them being the benefits of simplicity over complexity. A couple of days back, I was overwhelmed when I read a message on the University of What’s App wherein it was explained how inanimate objects have something to teach us about life. Be it a candle, a window, a chair, a pair of shoes, and likewise; everyone offers an important lesson that can be imbibed in one’s life.

COVID-19 and the resultant lockdown forced me (like various others) to work from home and with some additional time available I was able to observe people in our housing society trying to manage the water supplies. I started observing the water management practices with a neutral perspective. A detailed observation made me realize the commonality between water management and financial management. Allow me to elaborate on these lessons here.

Our major problem was less underground storage. Whenever the water department was benevolent, our underground storage tank would over-flow leading to loss of valuable resource. We fixed this issue by adding the capacity thereby transferring the otherwise wasted resource to our contingency storage. This started helping us on days when there were insufficient or no supplies from the department.

There are times when we splurge the bonus or ex-gratia money or unexpected profits in impulsive buying, something we were longing for but could have done well even without this buying. Think how prudently we could have used these sudden spurts of inflows to strengthen our financial situation by augmenting our contingency fund or reducing our liabilities. Our society executed this strategy and we are experiencing better availability of water supplies on days when the supply is insufficient. Using this strategy of transferring the unplanned inflows to repay loans we were able to help one of our clients to come out of a probable debt trap.

On the home front, we were scared to think of a situation when we do not have water for a day or two in the house due to low or no supply of water. To have better control over the situation the whole family decided to become smarter with water consumption. We analyzed the water consumption pattern of all members in the family and realized there is a scope of reducing water consumption without compromising on any aspect of cleanliness. The responsible implementation led to a reduction in water consumption by 20-25%. This was a massive revelation to us and a source of motivation. Imagine you decide to cover 100 mts distance every day and you start from 25 mts line instead of 0 mts line! Managing water consumption this way assured that the water tank level, which otherwise reached below critical levels by evening, lasted till the next day morning.

Now, just think what happens when we do not create a budget, do not tag the actual spending against the budget, and do not scrutinize the variations between the budgeted and actual expenses. In our budgetary exercise with our clients, we have experienced that the clients are usually unaware of their actual expenses since they are not in the habit of writing them down. Generally, the actual expenses are 15-20% higher than the perception. This results in low balances when they near the end of the month and resultant anxieties start troubling them. The best solution to come out of these anxieties is to create a habit of writing down your daily expenses. This ensures that you are in control of your spending. Over a period, you start spending less. Consequently, you have more money at the end of the month, and you do not have to start from zero. This happens because when you start writing, the mind starts evaluating the appropriateness of spending and this reduces impulsive buying thereby reducing our expenses. This is how we create better cash flows from our existing situation; similar to the successful result from the water management exercise we discussed above.

Simple and effective solutions require us to be observant and aware of ourselves and our surroundings. Too much noise around us emanating from the various gadgets and social media restricts such simple flows thereby making our life complex. Be humble, simple, and observant and we will find solutions to various challenging situations around us.

– Vivek Damani