Forced savings see a spike as households tweak spending habits

Now people have realized the real difference between ‘need’ and ‘want’.
Representational Image
Representational Image

CHENNAI: The coronavirus pandemic has taught crucial life lessons to many. But what Debadutta Mohanty has learned during the lockdown changed his life and helped him to leverage his financial condition. Mohanty, who works as an IT official in an MNC in Chennai, used to spend half of his salary on food and travel.

However, as restaurants were shut during the lockdown and with no option available to eat outside, Mohanty started exploring his cooking skills with the help of Youtube and other social media platforms. And soon, the 28-year-old realized that cooking, which started as a survival measure, has helped him to double his monthly savings.

“I used to spend almost Rs 12,000- Rs 15,000 towards food every month. Now as I am working from home, I have ample time to cook food, and in turn, my fuel cost could be saved. These habits have 
reduced my expenses significantly and I am now able to save a major chunk,” he said. 

Similarly, Mehar Agarwal, who works with an advertising agency in Delhi, during her work from home stint realized that she was wasting a lot of money on shopping. “Every weekend I used to visit malls for entertainment and spent money on movies, and then on clothes and accessories.

With nowhere to go, not even office, I realised that I was hoarding so many clothes and learnt that if I am a little vigilant towards, I can save Rs 20,000 a month,” said the 30-year-old woman.

Even experts are of the view that the pandemic-led work from home culture has led to forced savings.

“The change in lifestyle after the Covid-19 outbreak has left a positive impact on the financial thinking of many. Now people have realized the real difference between ‘need’ and ‘want’ and they are able to save more by paring down their discretionary expenses,” said Chennai-based wealth advisor, V Somasundaram. If these habits stay put, savings will increase further.

Income not spent 

  • Net financial assets of households rose to 7.7 per cent of the GDP in FY’20 

  • Salary and job cuts have taught families to curtail unnecessary expenses

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