Five Ways You Could Reduce Inequality in Daily Life

Start the new year by worrying less about things you can’t control and doing something about what you can. Inequality, for example.

Photo credit: wikimedia.commons.org

It’s a loaded term, alright, but let’s think like economists and see where exactly in our daily lives could we make a difference to mitigate inequality.

So here are my top 5 suggestions:

  • Pay your taxes honestly – While the government struggles with progressive taxation, you go ahead and do your bit. Pay your taxes honestly- no bungling rent receipts, or forged investment certificates anymore. Pay your taxes online and hey, when you eliminate corruption in private life, it goes a long way in eliminating corruption in public life.
  • Work on gender budgeting for the household: this is a much bandied about term but the govt still doesn’t get it right. This doesn’t mean you should be like that too. If you truly believe in gender equality, start paying your maids for their life saving work on par with your drivers. Allocate resources equally between genders for consumption, education, health and future savings. Always remember, gender inequality begins in households, and it’s well within you to tackle that.
  • Save for future big time – While you are young, who cares about ageing, right? Wrong! Demographic change is a reality and it will catch up with you sooner than later. Remember Japan? In India, social security net for its ageing population has shrunk. Add to this the effects of adjustment and without savings, you are in for a very cold and debilitating old age. Start saving big and do this till the time you are working. This is your safety net and your instrument to tackle inequality that may arise out of a combination of factors including economic shocks, ageing and changing labour market demographics, slowing growth and poor pension spending by govt.
  • Brighten your child’s prospects at intergenerational equality by security a child fund – If you have a child, this has to come right on top of your priorities. Start taking out a decent amount of your income for a child fund that grows as your child grows, to give you enough in the long run. Remember, a child’s education 10 years down the line would need a minimum of a crore INR, conventionally speaking. If you are aiming Ivy League, you wouldn’t want to just hedge your bets on scholarships. Work out a fund that pays out 5 crores. An equal amount for marriage ceremonies, contingencies, and helping the child settle down as he starts out in this big, bad world. We have seen how that works, so better safe than sorry.
  • Delay gratification, cut down on unnecessary spends, learn to grow your money – More savings that outflow means more money, simple. Yet, not so simple. When the value of money and your purchasing power has been deciding with inflation, you don’t need to just guard against excessive spending; you also need to grow what you have. But money doesn’t grow on trees! Start to get to know how to spot great shares you could buy, how SIPs work, how much of mutual funds is good for you, and how traditional more conventional ways of growing your money can still help you. Check out Monica Halan’s super advice on all do these in her book ‘Let’s Talk Money’. I have been holding off a review of the book for sometime; will do this soon. Keep watching this space.

So that’s it. Don’t wait for the govt or the capitalists to figure out inequality for you. You could do your bit. Why wait.

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