PERSONAL FINANCE MUSING 27 THE MAGIC OF SMALL SAVINGS- II THE GAZINGUS PINS AND MASLOW’S HIERARCHY OF NEEDS
PERSONAL FINANCE MUSING 27
THE MAGIC OF SMALL SAVINGS- II
THE GAZINGUS PINS AND MASLOW’S HIERARCHY OF NEEDS
We continue our journey of discussing the magic of small savings and how, over a long period of time and with the magic of compounding, they can grow into a humongous amount. We discussed a few simple ways to save up to Rs 3 to 4,000 per month in our last post including examples of what size this seemingly small amount can grow to. I am providing the link to the post below for continuity.
I am a fitness freak and love my early morning jogs/walks and visits to the gym- they are almost religious to me. What I also enjoy is tracking my progress on wearable fitness devices- I currently own four of them, of different shapes and sizes, with different characteristics. In fact, the only thing that I regularly follow during online window shopping is fitness devices- my shopping cart is full of them. Just a month back I was in the middle of online window shopping when I saw this fitness device that I was eying for last few months on 50 % flash sale. Despite this 50 % off, it was pretty costly and definitely not part of my monthly budget. But…it was too tempting because it was offering me continuous heartbeat monitoring- Surely, too much to be missed for a fitness enthusiast. Before I could say “Ghanshyam Das”, this device had moved from the shopping cart to items underway for delivery at my address.
As the initial euphoria of possession of yet another fitness device died down it dawned upon me that I have just “wasted” (totally unplanned) Rs 10,000 on something which I already had in plenty. Surely five devices are not going to give me any more happiness than four that I already owned. Now thinking about this continuous heart rate tracking, I realized that this facility was already existing in one of my other devices- albeit, on-demand and not continuous. And, who on earth wants to keep looking at his/her heart rate all through the day? I also realized that I am unlikely to be tempted by any other item in this manner, maybe jogging shoes would be another such item.
The fitness devices or jogging shoes, for me are my “Gazingus Pins”, a term popularized by Joseph R. Dominguez, Vicki Robin and Monique Tilford in their iconic book, “Your Money or Your Life”, a book I highly recommend you to read to put money in correct perspective in relation to your life. So, Gazingus Pin is any item which one finds hard, nay, impossible to resist buying. One will go for these items irrespective of how many of these items one already possesses or whether they are budgeted in the month or not. Needless to say, Gazingus pins will differ from person to person and may change for the same person from time to time. Just a decade back, when e-books were not available so easily, paperback books were my Gazingus pins. I would go to every book fest, Sunday markets etc. to browse through and buy books- most of which are still in my library, unread. I must confess, I have nearly 100 unread books on my Kindle too.
Gazingus Pin expenditure may not take place every day or even every month but the moment you are exposed to them, you can’t resist buying them. Common Gazingus pins could be clothing items (saree, shirts etc.), jewellery, footwear, perfumes, lipsticks, electronic gadgets or even “flash sales/50% off (or thereabouts) deals”, where one ends up buying things which wouldn’t have been bought at full price. We have to just open our wardrobe or drawers to find our Gazingus pins- you will find things that you bought on impulse and then never or barely used them. Yet, when you go to the mall next or window shopping online and come across the same item, you won’t be able to resist yourself.
The e-tailers like Amazon, Flipkart, Myntra etc. cash on to the Gazingus pin mentality in a big way. Your browsing pattern is closely monitored through their algorithm and your shopping cart becomes your dead giveaway. Even after you log out after your online window shopping, your Gazingus pins keep popping up on your smartphone with hard- to- resist offers. This relentless pounding of your weakness, your Gazingus pin, is sure to finally wear you down, making you buy it.
The amount of money that one would save by not buying Gazingus pins, if invested for long-term, can give you a seriously big corpus. A saving (from Gazingus pin impulse) and investing merely Rs 5,000 per month for a period of 10 years will make you richer by Rs 11.2 lac (assuming a 12% ROR) and Rs 85 lac after 25 years. The magic of small savings continue unabated.
The need for all of us is to look for and identify our own Gazingus pins- they will most likely be found in your wardrobes/drawers/online shopping carts etc. Also look for things that you have not used for last six months or more, obviously these are the things you didn’t need but just bought either as an “impulse purchase” or a “Gazingus pin purchase”. Incidentally, both these terms are different and we will cover them next week in the concluding post of this trilogy.
The mindset of “more possessions will bring more happiness” needs to be removed. We all remember Maslow’s hierarchy of needs theory- after our basic needs of Roti, Kapda, and Makaan are fulfilled we tend to seek psychological fulfillment by possessions. So while one pair of decent shoes will fulfill our basic need, we tend to acquire 20 pairs, most of which are rarely or never used. There is a fine balance between happiness which accrues from possessions and feeling of emptiness which accrues from over-possessions. We need to find that sweet- spot for our individual self.
Next week in the concluding part of this series of posts we will discuss “Latte factor”, “significant purchase” and “impulse purchase”. Hope these posts trigger small saving habits in you.
My book, “Musings of a (financially) illiterate father- a common investor’s guide to wealth creation and retention is scaling new heights every day besides generating a buzz and having great sales. The book (paperback) is currently available domestically on Amazon.in, Flipkart, Infibeam and Notion press, and internationally on Amazon.com and Amazon.co.uk. The e-Book version is available on Kindle, Kobo, i-books and Google Books.
I will urge you to continue to share this post too as my book has been specially written to teach the alchemy of wealth creation and retention to our children-they deserve to learn it. Please support this mission of financial literacy by reading and recommending this book. The link is given below.
My book is also being covered extensively by the Print Media, the latest by “Amar Ujala” on 13 Sep. I am forwarding the link here.
For now, enjoy your Sunday while reading my book- you have earned it.
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