Saturday, December 14, 2019

Of my mothers chit funds and my first world problems - Life lessons in a nutshell

For a change, I was home. I was glancing my personal task planner cum diary to see the pending story edits and proof reading to be completed for the day when the phone rang. Sudha aunty, a well-wisher and a relative (potential oxymoron) had called me to remind me about the pending payment for the chit fund. I never keep track of this fund, purely because it is managed by Sudha aunty. There is that element of trust on which this chit fund operates. Other than the pending payment reminder, she also said that this month’s payment is the end of this chit fund and that she was about to start a new chit fund from Jan. I agreed to be part of the new chit fund also and disconnected the call. My mom heard the conversation and inquired about the chit fund. The word "chit fund" took her back to her professional days as a teacher. We spoke about it for more than an hour. When we were done, I wanted to get back to work, but my mind was roaming around the realms of how my mom spearheaded an entire family’s offbeat expenses with the chit funds for years together. And in general, those chit funds’ with a purpose and its role in chasing the dreams of Indian middle class.

If you are wondering what a chit fund, a.k.a Cheeti as it is called in vernacular language is, it is a simple rotating savings and credit system practiced since times immemorial. There is no defined legal framework. An organizer is usually a trusted relative, a neighbor, friend or someone who you know at least as an acquaintance, so that there is an element of trust for the money you invest. People who invest in the chit funds often have specific goals/dreams that they realize using the returns from it. The fund starts at an announced date and continues for the number of months predefined by the organizer. Word of mouth is the only means of marketing and getting people to invest. When it starts, every month, a fixed amount is collected from all the subscribers. An open auction is conducted every month to determine the lowest sum one of the subscribers is willing to withdraw that month. It is also a credit system because subscribers are allowed to take the entire sum via the auction even before making full payment. Again, trust is paramount here.

Unlike the post liberalization and digital era, banking was not accessible to the lower income group as their savings was not distinct and continuous. If you are an early or mid 80s kids, you’ll know this. But savings was still required for obvious reasons. Cheeti was a boon for all those who had this situation. And unlike today, middle class dealt with currencies in mere tens, hundreds and thousands. Lakhs and crores were not part of even their wildest dreams.

My mom, being a school teacher, like any other middle-class Indian woman, was a “penny in pocket, dreams worth million” woman. With whatever she earned, she managed her finances and savings so meticulously that it puzzles me on how our era's middle class parents managed our upbringing. I personally know two of her affinities she chased for long, never gave up and succeeded. Thanks to Cheeti. One was her collection of sarees and the other was her collection of tools/equipment/apparatus that reduced her efforts in the kitchen.

Both her affinities were something that my father neither supported nor cared because of two reasons: One: that they were very feminine in nature and he did not understand much of it. And secondly, because they were not one-time investments. In her own words with utensils and sarees, when the usual “WHY DO YOU NEED SO MANY” paradigm come up by husbands for discussion, women do not have answers. So, mom had to somehow manage them on her own, even financially.

This is exactly where the chit fund, a.k.a. Cheeti helped my mother. In the early-80s she earned 800 Rs a month. Since she was a teacher, it was sort of necessary for to have her wardrobe full of sarees. It so happened that a seller from Surat used to visit her school and all the teachers collectively insisted him to start a Cheeti, exclusively for sarees. The monthly amount for the Cheeti was 70 INR which they paid for 12 months and got a new saree worth 800 Rs. Remaining 40 Rs was a commission of sorts for the saree seller. She always tells me that back in 80s, 800 Rs had a lot of value. It is true. I just did some math to prorate the inflation rate of 7.2% at 1985 for 34 years; it turns out, 800 Rs in 1985 is worth 9330 Rs as on today.

I keep chiding my mother for having so many sarees that we can sell and pre-close a part of India’s world bank loan. But she laughs it off. More than the prized possession, she is proud of how she succeeded in filling her wardrobe with sarees on her own, without a single penny from my father. She is all thanks to this wonder investment scheme called Cheeti.

By early 90s, utensils with copper bottom was a next gen thing, she tells me. When the copper bottom utensils were launched in the market, they were declared hit and received widespread fame among the Indian mothers. Not just fame, it apparently was also a measure of sophistication and even a social privilege to an extent. My mom was particularly interested in it because she believed that copper bottom kadais would help cook faster, thanks to copper’s good conductance of heat.  But it also came with a heavy price tag that she could not buy them in one go. Again, the same Cheeti came to my mother’s rescue. There was a steel vendor near the house, where she started investing 50 Rs a month and in the end, she could choose utensils worth of 600 Rs. There is this one copper bottom kadai, which is her favorite. Not because of its quality or durability, but because she simply succeeded in buying it on her own. It was the same practical scheme of Cheeti that enabled her to buy a “RAMA” water filter, a hot box and a few other utensils made of copper.

Her proud possessions after nearly three decades of her professional career are her Surat Saris, a copper bottom kadai, a RAMA water filter and a few other kitchen paraphernalia, procured through chit funds. If I look at it today, it does not seem like a big deal at all! I can buy her all of them at one go! I cannot help but see her goals mostly revolved around maintaining normalcy and ensuring the family chores run smooth. Nothing beyond! I think only mothers are the creatures on this planet who can do such insurmountable sacrifices for the well-being of their families and yet find solace in those sacrifices.

Here I am, totally delved in the first world problems and not being able to manage my finances even after earning a 6-digit salary. When my mom narrates such episodes to me, I can easily realize the perceived absence of any such pressing concerns that she had as an adult, as a parent or even as a professional. With real life experiences like chit funds, she beats my argument and proves that my problems are not actually problems, they are just fallacies of the relative privation.

 I too have invested in many chit-funds. But if I try to recall If I have bought anything until now, which has helped facilitate anything at home or brought about changes in running chores at home, nothing comes to my mind. This has made me realize one thing: Whatever they did, they had a purpose. And they were bold enough, courageous enough not to take solace in fallacies, like we all do.

Whoever said “The purpose of life is a life of purpose” is simply a genius who understood the essentials of life perfectly. Having a purpose can not only buy you saris, water filters and copper bottom utensils, it can guide life decisions, influence behavior, shape goals and offer a sense of direction. Now it doesn’t surprise me that even to this day, chit funds, without a legal framework, are very instrumental in realizing the dreams of millions of people out there, because their investments have a purpose. This chit fund episode has taught me a very important lesson:

To really reap the returns of your investment, it should first have a purpose.