[Mentoring the non-savers: Why we need to offer financial guidance to domestic helpers, small-service providers]
She came home mid-afternoon to inform us that she had to leave for her village. Her aunt has passed away and she had to be there for the next week. The travel would disrupt her life severely, but she did not seem to be hesitant in the least. She took a wage advance for the month and left. This was Shiny, from the neighborhood fishing village in Kerala, where she works at our host’s kitchen. The story of her life, and of those who live on daily wages or paycheck to paycheck, is this week’s story.
Shiny wakes up every day at 2 a.m. to go and buy the day’s catch from the local fishermen. She then goes to sell it in the fish market. She borrows every day from the local lenders at usurious rates she does not care to annualize. She knows that she would get Rs.100 and return Rs.102 at the end of the day. She comes back at around 10 a.m. with groceries for the day and cooks lunch, which is typically rice and fish curry. Her two daughters would have already gone to school after eating leftover rice fermented overnight with water. If she does not go to sell fish, there would be no food for the day, except konjee with a few grains of leftover rice.
Shiny is not alone. Nor is this extreme dependence on daily, weekly, or monthly earnings limited to people like her. Payday loans are an established and a growing industry, accommodating earners who have run out of money before the next paycheck. There are money lenders who operate in informal markets; they are present in residential communities as well as workplaces. There are otherwise well-placed salaried employees, who use their credit cards to tide over shortages. Living on the edge is prevalent in many households.
Some romanticize their lives, nonchalantly telling me that they are living in the present and not worrying too much about an unknown future. Some desperately seek breaks from the stressful routine of scrambling for cash, by taking breaks. Like Shiny did. She seemed happy about sleeping well and getting some meals every day for the next week, even if the rest of the household scraped through without her. Some feel like victims of a ploy to keep their incomes low, even as the rest of the world seems to move ahead; they do not see an escape out of their hole. A few manage to find the motivation to address the elephant in the room — inadequate income.
An outsider may judge severely this wage-to-wage, earning-to-earning kind of existence. They may find fault with their spending habits, or accuse them of not trying hard enough to do better. But to the households caught in this rut, an uneventful day, week, or month, when wages cover expenses, is happiness enough. They get used to it and are not bothered by it unless a crisis strikes.
An illness, temporary disability, turn of cycles at the workplace, or an unexpected event is enough to disrupt their lives severely. This lack of resilience is the biggest problem in a household that cannot save. Not all employers are accommodative since, at that level of income that is barely adequate for a household, it is easy to hire and fire. The income is both low and at high risk.
Shiny works at my host’s kitchen to supplement her income and send her girls to school. Her husband is an alcoholic and fritters away a portion of the household income. Reckless spending makes the problem worse. Sometimes the spending is needed to make their lives or their everyday suffering easier. Payday borrowers need their bikes to get to work; day-wage laborers need food to keep their physical strength from waning; women workers need daycare for their babies and toddlers to be able to turn up for work. Sometimes their lives’ circumstances do not support another job, while drawing down the income for necessary expenditure. It is a vicious cycle.
We cannot group all these circumstances together. The inability to save, which arises primarily from spending habits that are lifestyle- and desire-driven, needs counseling and control. Non-savers, who end up in a credit card-driven debt trap, have no choice but to ask for debt to be restructured and to pay up, even if gradually and painfully.
Non-savers, who just have no savings or surplus left after meeting essential expenses to run their households, need mentoring and handholding to be able to find better jobs and better incomes. Non-savers, who do not have the education, health, or resilience to strengthen their finances, need access to better markets and funding, subsidies, and care. They all need help from the government, the community, the markets, and from you and me. More than money, they need mentoring and handholding.
The regular stream of daily income that Shiny brings home every morning after selling fish should make her eligible for a cheaper loan, but she has no access to financial markets. If she moves from the cash economy to the digital economy that enables her to create a record for her income, she can, to begin with, start to formalize her life and reduce her borrowing rates. That is not all. She needs better quality education for her children at rates low enough for her to be able to afford, and medicare for the family that is easy, efficient, and cheap to access. These are systemic changes that must happen sooner than later.
There is also a responsibility for those of us who use the services of people like Shiny in our everyday lives. They are engaging with us in an obvious form as household help, and also as drivers, small service providers, small-time vendors, and such. We are still a relationship-based economy in which we talk to, care for, and inquire about the well-being of people around us.
Instead of waiting for the government to solve these problems, we can step up. Not as easy and lazy providers of cash and loan, but as mentors and guides who can help small businesswomen like Shiny to build strength and resilience. The retirement plans of many of us include consulting, leadership development, mentoring, and teaching. There is a large audience waiting for this service, with a very limited ability to pay for it. However, the satisfaction of making a difference to the community around us is huge. Are we ready to engage?
