Pavitjot Singh Chahal
I was excited last month when Prime and Feastables were launched in India. But then I saw their prices. So, my middle-class wallet showed me my place. Because if I bought 35 grams of chocolate for ₹ 400 or drank a drink for ₹350 with zero nutrition value. Then it will affect my pocket.
I never understand why these products are so expensive. But what difference does it make if I don’t understand or not? From kids to teenagers, everyone is crazy about these products and is ready to pay any price. And this attitude will destroy India. Okay, the statement is a little extreme. Not a little; it’s very extreme. So, let me tell you what I want to say.
A video went viral some time ago when people were buying Coldplay tickets by spending a month’s salary, where a guy was asking people simple questions on the streets. Tell me the names of the members of the Coldplay band. And as expected, no one had an answer.
This article is not about expensive chocolates, tickets sold in black or wasteful spending. This is about a virus that has taken over our minds. The name of this disease is Show-Off Trap. I guarantee that you must have a friend who is a victim of this disease. With that friend, please share this post. This article will tell you about what schools never tell you about money.
Chapter 1: Your Modern Neighbour
What is a Show-Off Trap? Let’s understand this through a short story.
Just imagine there are 3 houses in your neighbourhood. In all these three houses, three families are living. One day, Mr. Sharma, who lives in the first house, brings a shiny red car with a German-made automatic with leather seats. That car becomes the pride of the neighbourhood. Then you, who lives in the second house, look at your two-year-old car and think there’s a need to upgrade the vehicle. The next day, Mr Verma, who lives in the third house, celebrates his son’s birthday party in a 5-star hotel. Then there’s a trend in your house that celebrating birthdays at home is so middle-class. It’s essential to go to the hotel. This is not a luxury; it’s a necessity.
Keeping Up With the Joneses
You always see someone’s foreign trip, someone’s new 4K TV, someone’s home theatre, or someone’s luxury handbag. You get stuck in a constant cycle where you feel it is essential to upgrade your lifestyle constantly. And you think you’re falling behind. You’re not accepted. You’re a failure.
This phenomenon is called KEEPING UP WITH THE JONESES, where the spending habits of your neighbours dictate your purchasing decisions. Today’s problem is that our neighbours are not just one or two families; they’re the whole world.
I have no problem with Mr. Beast’s Chocolate or Prime. I have a problem with people not buying these products because they’re good products. They’re buying them because they want to look “COOL”. They’re buying these products to show that they can afford a lifestyle. Whereas the truth is, most of them can’t.
Chapter 2: The Big Problem of Gen-Z
Today, brands play with your emotions. They use FOMO (Fear of Missing Out) a lot. India’s Gen Z population is 37 crores. And every brand targets this population because there is a term in advertising, catch them young. Once a family member becomes a part of the iPhone ecosystem, he brings everyone to the ecosystem. That’s why, if you look at Apple’s ads, you will see that its target audience is young people. India’s Gen Z can spend $1.4 trillion, and it is easy to force them to pay. Why? If we can understand its psychology, then we can reach a solution.
Generation Gap
The people born between 1997 and 2012 are collectively called Gen Z. Gen Z is very special because it is the first generation in the world to be a digital native. What is a digital native? This means that the generation has grown up with digital devices, which, with the fast pace of technology, has learned to think and make decisions. The previous generation was different because they were digital immigrants—for example, our elder brothers or parents. They can use mobile phones, but they can still read newspapers and watch serials on TV. They have migrated from the print and television world to the world of mobiles. And this also has an impact on their view of money.
Spending Differentiation
What is money? 10 years ago, if you asked any Indian this question, the answer would be simple—the cash they use to run their household. Yes, Gen-Y uses cash to spend, not UPI like Gen Z. The biggest quality of cash is that you feel the money is over every time you pay cash. If a ₹10 note goes from your pocket to someone else’s pocket, then a sense of loss is born. There is a realisation. There are a lot of friction points in the cash economy. However, the digital native generation makes payments from UPI and credit cards in a jiffy way.
Today, we live in the world of scanning, swiping, and tapping to make payments. It takes as much time to spend ₹10 as it takes to spend ₹10,000. Psychologically, the brain doesn’t realise that the money is getting less because there is no friction. The process is entirely seamless.
Social FOMO
Don’t get me wrong. This development is quite good; it benefits businesses. However, as consumers, our wasteful spending can also increase. Earlier, it was impossible to spend money that wasn’t with you. But today, such apps are available that give a loan against your salary slip. Or they will provide you with a salary in advance. The more we scroll on social media, the more our FOMO increases. If you wear the same outfits in the wedding season, what will people say in the Instagram stories? This FOMO and your bank balance have the opposite connection. Just as social media increases your FOMO, your savings are reduced.
No-Cost EMI Trap
Due to the low cost of EMI, we are buying things we can’t afford. And that’s the main issue. You should purchase things at no cost EMI when you can afford them. Not when you can’t afford it. Having dreams and aspirations is not a bad thing. But when it impacts our future, then it’s a big problem.
Chapter 3: Lifestyle Creep of India
In India, we always talk about salary but don’t understand an essential concept.
Savings=Income-expenses.
When you work hard, your salary increases. Your paycheck doubles. But still, you save the same amount of money. Why? As income increases, our lifestyle becomes more expensive at double speed. Expenses are always higher than the speed of salary hikes. At the end of the year, you realise that even though your salary has increased, you still have less money. This is called Lifestyle Inflation.
Lifestyle Inflation
Investopedia defines Lifestyle Inflation as when a person’s income increases, expenses also increase. Every time, even when the salary increases, it becomes uncertain for people to get out of the burden of debt, save for retirement, and plan big goals. They get stuck in the rat race of paycheck to paycheck forever and never get out of this trap.
Most Indians are just ‘one hospitalisation away from bankruptcy.
– Nithin Kamath (Zerodha co-founder) Hindustan Times
People with good salaries fall into this category because they don’t plan. They don’t even feel it’s important to plan for future crises, retirement, and medical emergencies. Gen Z is not responsible for this situation. The following factors are also responsible for the same:
- Family Pressure
- Social Expectations
- Social Comparisons
- Show Off Culture
It’s essential to understand the difference between real wealth and show-off wealth.
Chapter 4: Solutions
What is the solution to this show-off trap?
Solution 1: Make a Fun Fund
Track and budget your expenses. These things seem easy to say. But like a New Year’s resolution, follow them for at least 3 days. The solution is to permit yourself to enjoy smartly. Try this trick. Withdraw some money from the bank at the beginning of the month. Consciously, try to spend the month and pay for all your enjoyment expenses with that money only. If the money runs out on the 15th, your brain will get a message that the costs are higher than your expectations.
Pro Tip: You must have three bank accounts.
First, Salary Account: In which your salary credits.
Second, Spending Account: With which you spend.
Third, Savings Account: In which you save. Additionally, invest all the saved money somewhere.
Solution 2: Pay Yourself First
Think about it: If you’re doing a good job and earning money. Then, how hard have you worked? You have 15 years of education, exams, and cracked multiple interviews. You’re getting the result of that hard work today. Your past self owes you. How will you repay? By paying your future self. Paying yourself first means that whenever you get money, you shouldn’t spend it on sudden impulses.
You should adopt a 50-50 approach. 50% of yours and 50% of your future. The future goals can be anything. It can be your down payment of your future home. It can be family vacation planning. Or investment in your further education or business. These will support your future self. There is a lot of uncertainty in life. But if there are funds for emergencies, then you get some relief.
Solution 3: Can You Buy It Twice?
Follow a rule in life. If you cannot buy it twice, you cannot afford it. What does it mean? Let’s understand this with an example.
If you want to buy a new car and the EMI of the car is ₹30,000, your salary is ₹60,000. You should understand that this car is out of your budget. Because if you spend ₹30,000 for the EMI of the car every month. Then how will you manage other expenses like petrol, maintenance, and servicing? This means you won’t be able to afford those things either. So think about it: can you buy it twice?
The Bottom Line!
Happiness is not found in materialistic things. Because whenever you buy something and open it, use it, you get used to it. When you get used to it, that thing doesn’t give you happiness. That just becomes okay; this is there. We end up taking those things for granted. Then, our joy ends. This is the main problem of show-off culture. It always tries to let other people think you live a better life than you actually do.
The purpose of this article was to show today’s youth a mirror. There’s a line in the movie Fight Club, i.e.,
“We buy things we don’t need with money; we don’t have to impress people we don’t like.”
Today, we need to understand that money is ours. We and our parents have earned money through a lot of hard work. So, the people who use this money for show-offs are never honestly happy. It makes a difference to me to save you from this show-off trap!
GIPHY App Key not set. Please check settings