Financial Sustainability & You

Sustainability is a relevant buzzword in our times, but how does it factor in our financial lives?

The word sustainability has been used quite a bit in our times, but what does it really mean?

A simple way of defining it is adopting a process that acknowledges our needs in the present but does not compromise our ability to meet future needs.

A Fine Balance

Sustainability is commonly used when talking about the natural environment and its interaction with humans. Here, it describes a process of maintaining an existence that will enable the Earth to continue supporting life. The keyword here is ‘process’, an ongoing and actively evolving exercise. Humans are dynamic and inventive, but we are also extractive. So, the more we consume, the more we erode from our future.

Sustainable Finance

While we all are trying to find sustainable ways of existing in our lives, it’s important to know that financial sustainability can make our lives more wholesome, productive, and stress-free.

In a financial context, sustainability means making informed decisions that can enable an individual or organisation to thrive financially and continue thriving for a long time to come.

Financial Sustainability Changes From Generation to Generation

In our parent’s generation being financially sustainable meant saving up instead of spending. Lifestyle expenses were seen as indulgent and unnecessary. As time progressed, innovation and technological advancements have changed our spending habits, making it necessary for us to reprioritise what ‘necessary expenses’ meant to us.

While saving up is crucial to financial wellbeing, we can’t deny that the modern world is characterised by a need for instant gratification. In a world of credit cards, loans and EMIs, we are constantly spending money we do not have, hoping that our future earnings and endeavors will cover these spends..

Financial Sustainability for a Modern Era

Sustainability needs to be reevaluated for the modern consumer. That means, apart from buying aspirations, existing debts need to be accounted for as well, which are usually in the form of credit cards and EMIs. The modern consumer needs to be educated on the various channels through which he/she manages his/her financial life.

For a credit card user, we need to factor in the various aspects of credit- limits, interest rates, taxes and cost of missing payments. And since it usually takes time to repay EMIs, we also need to consider the sustainability of debt i.e. the ability to repay it without compromising on other expenses. Good practices for financial sustainability include making sure the EMI is affordable and spending on situations where there are potential for getting some kind of return, such as enrolling in a course to get higher earnings.

So while the goal of financial sustainability remains the same i.e. creating favourable conditions to thrive in, the process has changed and consequently, so does the decisions involved to achieve or maintain that. Mismanagement of credits and loans are a big hurdle towards financial sustainability.

Opening Up Financial Agency for New India

India, as one of the world’s fastest growing economies, is also following this trend. However, a huge percentage of working India do not have access to formal credit. Traditional institutions do not cater to the financial needs of low income workers, which a majority of working India belongs to. We turn to informal options like moneylenders and loan sharks, which are not sustainable as they typically charge high interest rates. More often than not, inability to repay these loans lead to a lifetime of indebtedness.

Taking these into consideration, NIRA focuses on sustainable loans for lower income workers at the lowest interest rates possible, The loans can be paid over the course of upto 12 months. Interest rates will also be reduced based on performance. To ensure your financial sustainability, NIRA will only offer what we feel you can repay. NIRA’s mission is to empower individuals with financial freedom and sustainability plays an essential role in it.

What does financial sustainability mean to you? What are the things you believe are worth spending on responsibly in the world we live in today? NIRA would love to hear from you!