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Is it really that common for people in India to live so close to the edge without savings that they regularly need help? I know my friends and I (in the US) al

by zeroer 10y ago

Is it really that common for people in India to live so close to the edge without savings that they regularly need help? I know my friends and I (in the US) all have buffers of at minimum a few months of expenses. I guess it's not inconceivable that someone might have an emergency that requires more, but that would end up being a rather substantial of money. In my friend circle, I've never heard of someone borrowing money.

ehnto 10y ago
That honestly surprises me. I cannot say the same for people in Australia, a similar culture to the US. I think you might be surprised how many people outside of your friendship circle are actually living paycheck to paycheck. It is a smart thing to try and have though.
geodel 10y ago
Seems you are not much aware of outside the relatively well off friends' circle. Here is how precarious financial conditions for lot of americans is [1]. Key Quote: "47 percent of respondents said that either they would cover the expense by borrowing or selling something, or they would not be able to come up with the $400 at all." On the other hand in India it would be very obvious to borrow money considering around 80% of population live on couple of dollars a day. 1. https://www.theatlantic.com/magazine/archive/2016/05/my-secret-shame/476415/ https://www.theatlantic.com/magazine/archive/2016/05/my-secr...
ido 10y ago
It may help to remember that the average yearly wage in India is about $3000[1]. [1] https://www.quora.com/What-is-the-average-annual-salary-in-India/answer/Praveen-Venkiteswara-Annu https://www.quora.com/What-is-the-average-annual-salary-in-I...
- zeroer 10y ago
  I realize there are income differences, but I don't think it's terribly relevant. Even if I have low income (and concomitant low expenses), then my choice is to save money consistently when times are good and then spend extra money during some time period; or I can not maintain any savings, spend extra during some emergency by borrowing money, and then spend less afterwards to put money toward my incurred debt. Both of these financial life plans earn and spend the same amount of money, but one of these plans seems much more stressful than the other. None of the preceding is at all related to the amount of income or spending, only the timing.
  - dilemma 10y ago
    Income differences are terribly relevant. How could you think otherwise? If you make more, fewer times will be emergencies. They will just be normal events.
    - zeroer 10y ago
      It's certainly true that making more money will lead to an easier life (otherwise what would be the point?), but I don't think you're addressing my central argument. Whether someone saves money prior to an emergency and then spends their savings, or they borrow for the emergency and slowly pay it back over time, the person still earns and spends identical amounts of money. The difference is the ordering of events. No matter how poor the person, if he or she is capable of repaying loans after the fact, then he or she is capable of saving money before the fact. I've of course read the statistics that 30-50% of Americans couldn't handle an unexpected expense of some moderate magnitude, but I admit I don't really understand the psychology behind it. You're going to get to spend all the money you earn in your life either way. Why not time it to maximize happiness and/or reduce stress? Some other commenters have correctly guessed that my income is higher than the median and for some reason think that this is a reason why I can't or shouldn't have an opinion on the matter. But this wasn't always the case. All through my twenties I was poor, but even still I always strived to have 6 months of expenses in a savings account. The only times I didn't have 6 months of expenses in cash were the times I had emergencies or a couple times I bought a cheap used car with cash.
    - wst_ 10y ago
      No, they are not. What is important is how much you can buy using your average salary. Buying power is important. And the prices in India are much cheaper.
oblio 10y ago
You and your friends are probably earning (a lot) more than the US median income ;)
- zeroer 10y ago
  I'm retired, so unlikely.
  - oblio 10y ago
    Then you're probably not paying rent due to owning something. Or maybe you live a very frugal life, kudos to you, not everybody can do it (I'm myself in the frugal camp, but I don't think it's for everybody out there).
    - zeroer 10y ago
      > Or maybe you live a very frugal life It's this one.
wst_ 10y ago
You have to remember that India culture and western culture are so different that you can't compare them whatsoever. The meaning of friend is completely different there. People behave differently to friends and to strangers alike. (edited typo)

by zeroer 10y ago

ehnto 10y ago

That honestly surprises me. I cannot say the same for people in Australia, a similar culture to the US. I think you might be surprised how many people outside of your friendship circle are actually living paycheck to paycheck. It is a smart thing to try and have though.

geodel 10y ago

Seems you are not much aware of outside the relatively well off friends' circle. Here is how precarious financial conditions for lot of americans is [1]. Key Quote: "47 percent of respondents said that either they would cover the expense by borrowing or selling something, or they would not be able to come up with the $400 at all." On the other hand in India it would be very obvious to borrow money considering around 80% of population live on couple of dollars a day. 1. https://www.theatlantic.com/magazine/archive/2016/05/my-secret-shame/476415/ https://www.theatlantic.com/magazine/archive/2016/05/my-secr...

ido 10y ago

It may help to remember that the average yearly wage in India is about $3000[1]. [1] https://www.quora.com/What-is-the-average-annual-salary-in-India/answer/Praveen-Venkiteswara-Annu https://www.quora.com/What-is-the-average-annual-salary-in-I...

zeroer 10y ago
I realize there are income differences, but I don't think it's terribly relevant. Even if I have low income (and concomitant low expenses), then my choice is to save money consistently when times are good and then spend extra money during some time period; or I can not maintain any savings, spend extra during some emergency by borrowing money, and then spend less afterwards to put money toward my incurred debt. Both of these financial life plans earn and spend the same amount of money, but one of these plans seems much more stressful than the other. None of the preceding is at all related to the amount of income or spending, only the timing.
- dilemma 10y ago
  Income differences are terribly relevant. How could you think otherwise? If you make more, fewer times will be emergencies. They will just be normal events.
  - zeroer 10y ago
    It's certainly true that making more money will lead to an easier life (otherwise what would be the point?), but I don't think you're addressing my central argument. Whether someone saves money prior to an emergency and then spends their savings, or they borrow for the emergency and slowly pay it back over time, the person still earns and spends identical amounts of money. The difference is the ordering of events. No matter how poor the person, if he or she is capable of repaying loans after the fact, then he or she is capable of saving money before the fact. I've of course read the statistics that 30-50% of Americans couldn't handle an unexpected expense of some moderate magnitude, but I admit I don't really understand the psychology behind it. You're going to get to spend all the money you earn in your life either way. Why not time it to maximize happiness and/or reduce stress? Some other commenters have correctly guessed that my income is higher than the median and for some reason think that this is a reason why I can't or shouldn't have an opinion on the matter. But this wasn't always the case. All through my twenties I was poor, but even still I always strived to have 6 months of expenses in a savings account. The only times I didn't have 6 months of expenses in cash were the times I had emergencies or a couple times I bought a cheap used car with cash.
  - wst_ 10y ago
    No, they are not. What is important is how much you can buy using your average salary. Buying power is important. And the prices in India are much cheaper.

oblio 10y ago

You and your friends are probably earning (a lot) more than the US median income ;)

zeroer 10y ago
I'm retired, so unlikely.
- oblio 10y ago
  Then you're probably not paying rent due to owning something. Or maybe you live a very frugal life, kudos to you, not everybody can do it (I'm myself in the frugal camp, but I don't think it's for everybody out there).
  - zeroer 10y ago
    > Or maybe you live a very frugal life It's this one.

wst_ 10y ago

You have to remember that India culture and western culture are so different that you can't compare them whatsoever. The meaning of friend is completely different there. People behave differently to friends and to strangers alike. (edited typo)