Have you ever had conflicting emotions regarding the same issue? It seems to happen quite often to me when I look at the ways in which senior citizens handle their money. At times, I wish I could be as organised and involved with my own finances. At other times I roll my eyes and make myself a promise never to end up like them when I grow older. I guess it’s only natural that there are some things that you envy and some which you absolutely detest and don’t want to emulate ever.
This my attempt to list three traits I would love to work on with the older generation as an inspiration and three aspects I would want to do differently.
Traits to take from the elderly
Being completely involved and conscious with money: Generally, during our conversations with customers, we check on the current expenses and many clients have absolutely no idea how much they spend. The initial figure given by them is close to half of what they actually spend, when they sit down to reconciling their expenses. It invariably comes as huge shock that they have been spending far more than they had assumed.
But, in the case of senior citizens, we notice that they always have a handle on their expenses, and they are usually pretty accurate. Many of them have a system of recording expenses and reconciling their bank accounts every month. With years of practice, it has become a truly ingrained habit. During the lockdown, many children would have had a tough time convincing their parents that the customary visit to the bank was not really important and an emergency worth risking exposure to.
Somehow the younger lot seem to find tracking expenses tedious, even painful. While being obsessed with accounting for every rupee may not work for us, having a broad idea and hence a budget can work very positively when handling your finances.
Delayed gratification: For most of us, waiting and giving a thought to something which has our fancy is not normal. It doesn’t help that you can buy most things at a click of a button. We buy in a hurry, get momentary joy and sometimes regret in leisure. This is not the case with older people: they mull over their decision for a while, and when they do decide to go ahead, they derive a lot of joy from their purchases. This ability to think ensures that most of their money is spent on things that really are needed or experiences which bring them joy.
The idea here is not be frugal and deprive yourself; it is to be sure that whatever you spend for is useful or brings some joy into your life.
Relationships have depth: The other aspect, which is such a boon and I would surely like to work on, is relationships. The amount of effort they put into a relationship is truly amazing, and despite not having the technological tools to keep in touch, they are strongly connected to the extended family and friends. They are more involved in the lives of most people they meet; it is not unusual that your mother will know details of the bank manager’s children or the ailments of the security guard’s wife. In contrast, the younger the person the more superficial and transactional the relationship.
Where we need to tread a different path
Depriving self to ensure your children’s welfare: Look around you. I am sure you will find ample examples of this. We come across senior citizens who are parents of very well-to-do children. They have accumulated sizeable wealth during their lifetime by being both prudent and smart. Many of them do not want to touch their capital; they only want to use up the capital appreciation or interest portion. If this means depriving themselves of even simple things which bring them great joy, they do that without any hesitation.
When we explain that the children are well to do and may not find great value in the estate left behind and would probably be happier seeing their parents enjoying their wealth, it usually falls on deaf ears. This is something I would like to avoid.
Seeking safety at all cost: Safety and guarantee are words that most senior citizens love. Of course, there are exceptions to this and I have interacted closely with them too. But, by and large, short-term volatility is viewed negatively, and they would rather settle for tax-inefficient, low-yielding instruments. No amount of discussion of how inflation will erode purchasing power works on them. Each one’s situation is different, and such an investment may be suitable in some cases. In others who are investing to build an estate for example, it would make sense to have a diversified portfolio.
Unwilling to adapt to change: Many of them find it difficult to adapt to the changing times. If something has worked for them in the past, they stick to the same formula and are supremely confident that things will turn around. For example, real estate and gold are some investments that worked for them in the past. They are unlikely to move away from this thought even if the house is visibly depreciating in value; they hold on, in the hope of a miracle.
It is true that you may see these behaviours in much younger people too. However, this is based on my various experiences with both younger as well as senior citizen customers. I have met quite a few seniors who have all the positive traits mentioned above and none of the negative ones. They are an absolute delight to interact with. But I am yet to figure out how they have bucked the trend and managed to keep up with the times. I can only hope and pray to be amongst this small minority as age catches up.
(The writer is a Certified Financial Planner and Founder of Finwise Personal Finance Solutions)