UNIT IV

Adulthood

With the advent of adulthood, the adolescent passes through the portals of what may be termed as the “real world”. One enters the world of higher education, work, and marriage, and gets involved in establishing one’s own family. Hence responsibilities of the individual increase manifold. In this unit you will learn about the major factors that play a role in determining the quality of adult life, these being health and wellness, financial planning and management, maintenance of fabrics and apparel that one uses personally as well as in the home, and appreciation of different perspectives in communication. The unit concludes with a chapter on individual responsibilities and rights, not only for one’s own self, but also in relation to the family and larger society.

15 Health and Wellness

15.1 Health Scenario in India

A cursory glance at the health profile of Indians shows that there is scope for substantial improvement. The 2008 report of the World Health Organisation reveals to us the following data:

Total population: 1,151,751,000 Life expectancy at birth: 62 years for males, 64 years for females Healthy life expectancy at birth: 53 years for males, 54 years for females Probability of dying under five (per 1000 live births): 76 Probability of dying between 15 and 60 years (per 1000 population): 276 for males/203 for females

Source: World Health Statistics 2008

Source: The Investment Information and Credit Rating Agency (ICRA) – Report on Indian Healthcare and Technology Information Forecasting and Assessment Council (TIFAC), Department of Science and Technology (DST), Government of India

These startling facts on health status in India and the projection that “by 2025, it is likely that one in every five Indians will be diabetic”, highlights the need for every Indian to become aware about health and fitness as important dimensions of their lives. Besides diabetes, the increasing prevalence of heart disease, osteoporosis, infectious/communicable diseases such as hepatitis, tuberculosis, AIDS, etc. have become public health problems and need immediate attention at all stages of life.

It is now recognised that there is a shift in the causes of death (mortality) from infectious and communicable diseases in the past, to non-communicable diseases such as diabetes, heart disease or cancer. Experts estimate that the number of persons having non-communicable diseases will increase in the future and there is an urgent need to address this problem, nationwide and worldwide.

It is important to note that many of these diseases were earlier seen in older persons. However, it is of concern today that many of these diseases are now found to occur in youth and younger adults. Another point of concern is that these diseases are not restricted to upper income families alone. Persons from low income families, especially in urban areas, are prone to these problems. It is stated by health experts that most of these health problems are due to unhealthy diets and lack of physical activity.

Therefore, the world’s apex body dealing with health, the World Health Organisation (WHO), has made recommendations to develop a global strategy on diet, physical activity and health. Simultaneously, the Government of India is equally concerned about the increasing health problems and related issues. As such when diseases increase, there will be tremendous pressure in terms of: (i) providing health care to such persons, (ii) the economic cost to the person and her/his family as well as to the nation, since the government also has to provide health care and treatment facilities for these problems, (iii) adverse impact on the quality of life of such persons, and (iv) promoting and maintaining their health as well as their capacity to function ‘normally’.

15.2 Healthy Persons

Healthy persons are those who are physically fit and active, cheerful in their outlook, have adequate immunity against infections and are not easily fatigued. Research has indicated the benefits of healthy diets, physical activity, individual action and population-based public health interventions. Unhealthy diets generally include consumption of energy dense foods (high in sugar and fat). They are also high in salt. Such foods when eaten in higher amounts than what the body requires and coupled with reduced activity levels across all age groups, especially adolescents and adults, increase risk of non-communicable disease. Diet and physical activity both influence health independently as well as together. Physical activity is a fundamental means of improving physical and mental health. There is a tremendous need to increase awareness and promote better lifestyles to prevent people from having health problems. The risk of developing diseases such as diabetes, heart disease and hypertension in youth and adults is higher among individuals who are overweight or obese. Health professionals commonly use anthropometric indicators (body measurements) to assess nutritional status and risk.

A simple indicator is the Body Mass Index (BMI) that is commonly used to classify underweight, overweight and obesity in adults. This index basically tells us whether a person’s weight is appropriate for her/his height (i.e., ‘weight-for-height’). It is defined as the weight in kilograms divided by the square of the height in metres (kg/m2). For example, an adult who weighs 70kg and whose height is 1.75m will have a BMI of 22.9.

BMI = 70 (kg) / 1.752 (m2) = 22.9

WHO has recommended use of ‘cut-off points’ for determining whether individuals are underweight, overweight, obese or normal as shown in the Table 1. Thus, if a person’s BMI is below 18.5 he/she is classified as underweight. Similarly, cut-off points have been given for three categories ‘normal weight’, ‘overweight’ and ‘obese’ and subcategories within each. For each of these, there is a minimum value and maximum value (a range of values). The health risks are higher as BMI increases because there are numerous related changes occurring in the body which are detrimental. These include increased body fat (adipose tissue), decreased glucose tolerance, changes in blood cholesterol etc.

Source: Adapted from WHO, 1995, WHO, 2000 and WHO 2004.

BMI values are age-independent and the same for both sexes but to some extent may differ in different populations due to genetic, ethnic and racial factors. Among the various ethnic populations, research evidence indicates that Asians have higher risk at the same BMI compared to others. Hence the WHO has found it necessary to further subdivide the categories (as shown in the third column of Table 1).

Note to Teachers: It is recommended that teachers familiarise themselves with this concept in order to explain it better to the students. Please refer to the notes for teachers at the end of the chapter.

In order to maintain good health and maintain desirable body weight, the following recommendations have been made by health experts for populations and individuals to achieve energy balance and a healthy weight.

15.3 Fitness

Health is promoted not only by appropriate, well balanced diets but also by physical activity and fitness. There was a brief discussion about fitness in Chapter III in Unit I of Part I on Understanding Oneself: Adolescence. Here, the focus will be fitness at adulthood. As the human body advances in age, certain changes take place resulting in various changes including decline in capacities and body functions.

Exercise and some physical activity are of utmost importance for maintenance of physical fitness and to sustain a healthy life as well as to establish a certain quality of life. Regular exercise burns up extra calories consumed and reduces the likelihood of the surplus calories being converted into fat. Regular exercise makes a person fit. Persons who exercise regularly experience a sense of well-being and sleep better. Exercise also makes the heart and lungs work more efficiently, improving circulation and respiration. Exercise carried out for about 20 minutes at least three times a week is beneficial. Older people should undertake exercise regularly so as to prevent and control several of the diseases like obesity, hypertension, diabetes etc. In fact youth and young adults should begin to take precautionary health regimen to stave off these diseases at a later stage.

Benefits of exercise in adulthood

(i) Exercise and illness: Exercise reduces the risk of acute and chronic illness through improving body composition, affecting metabolism and cardio-respiratory fitness. It decreases disability by improving endurance, muscle mass, muscle strength, agility and flexibility. It helps to prevent and treat common, often difficult–to–treat problems seen among older adults such as depression, insomnia, anorexia, constipation, and cognitive impairment.

Exercising regularly yields specific benefits such as:

• Helps to postpone disability by as much as 15 years. Even inactive persons, once they begin to do small amounts of exercise derive considerable health benefits.
  
• Lower body exercises help to establish/retrain balance in older adults.
  
• Helps persons who are overweight/obese to lose weight.
  
• Helps in maintaining desirable body weight.
  
• Helps to control blood sugar levels and blood pressure.
  
• It helps to maintain bone mineral density and thus reduces the risk of fractures and disability especially among the elderly.
  
• Helps to enhance muscle strength in both upper and lower limbs (training for a couple of months can help to increase strength of our lower limbs)
  

Exercises can be grouped into three broad categories:

• Endurance building /Aerobic exercise
  
• Strength building /Resistance exercise
  
• Promoting balance /Flexibility excercise
  

The benefits of these exercises are summarised in the box below.

There are 1,440 minutes in every day. Schedule 30 of them for physical activity! Make exercising part of the daily routine to ensure wellness in adulthood.

(ii) Exercise, mental health and well-being: In addition to the benefits for physical health, there is growing awareness and scientific evidence of its benefits for wellness and mental health. Scientists at Duke University, USA, studied persons suffering from depression for 4 months and found that 60% of the persons who exercised for 30 minutes three times a week, overcame their depression without any medication. Another research study showed that short workouts of 8 minutes could help lower sadness, tension and anger along with improving resistance to disease in healthy people. Many people have found that exercising helps to boost confidence as well as reduce anxiety and stress, all of which contribute to psychological health and well-being. Thus, exercise can be viewed as a wellness activity that prevents physical and mental health problems.

Experts caution that viewing exercise as a punishment can hamper its benefits. On the other hand, exercise should be enjoyed. The physical pain and soreness that one feels in the first few days gradually disappear. In India, yoga and meditation have been traditionally used to achieve mental health and well being. Yogic asanas help the body become more flexible. Researchers have shown that yoga also has benefits for conditions such as diabetes and high blood pressure.

During and after exercise, the brain releases substances called endorphins. These are the body’s natural painkillers and also increase feelings of happiness and well-being. Today’s lifestyles, especially in urban areas and metropolitan cities, are fast paced and more stressful. Hence it is crucial to ensure that every individual takes care of her/his physical and mental health.

In 2002, the World Health Organisation deemed ‘Physical Activity’ the theme of World Health Day. Since then, April 6th is celebrated as the World Day for Physical Activity. This is an example of a global initiative aimed at promoting health through physical activity across populations.

15.4 What is Wellness?

Wellness is a state of optimal well-being. It means achieving balance and harmony in all aspects of our lives. Wellness is achieved through the integration of physical, social, emotional, intellectual, spiritual and environmental health. It is a proactive, preventive approach designed to achieve optimum levels of functioning. The concept of ‘wellness’ is a unique perspective that lays emphasis on facilitating health and well-being. It focuses on human strengths as resources for health, rather than dwelling on problems, needs or weaknesses. Promoting wellness is an approach to prevent ill health or dependency on doctors and medicines.

How does the wellness approach help?

Wellness improves ‘Quality of Life’ by reducing risk of disease, disability, discomfort and distress throughout the life cycle. It is of paramount importance to promote positive human strengths which in turn can help foster growth and development, harmony and well-being.

The wellness approach requires first and foremost that a person should take responsibility for the quality of one’s own life. It begins with a conscious decision to have a healthy lifestyle that will lead to high levels of well-being and life satisfaction.

Wellness is a choice…. a decision made to achieve optimal health. Wellness is a way of life…. a lifestyle that helps a person to reach one’s goals and realise one’s potential Wellness is a process…. a sequence of decisions and behaviours that lead to health, well-being and happiness. Wellness is holistic …. an approach to integrate the body, mind, and spirit with the appreciation that all our beliefs, thoughts, feelings and actions greatly influence us in everyway. Wellness is wholehearted acceptance of self situations and circumstances….with all of one’s weaknesses, strengths and challeges

The holistic approach to well-being is described in the diagram that portrays the dimensions/focal areas for a healthy lifestyle.

Figure 1: Dimensions of a healthy life style

Wellness has become an important area of research in order to understand it and provide guidelines for practice and promotion. Evidence from numerous studies indicates that persons rated ‘high’ on the wellness and well-being profile have in common the following qualities:

• High self-esteem, a positive outlook and a sense of purpose
  
• A strong sense of personal responsibility and commitment
  
• A good sense of humor
  
• A concern for others
  
• A respect for the environment
  
• A physically fit and an integrated healthy lifestyle
  
• Absence of addictive behaviours
  
• A capacity to cope with life’s challenges
  
• An ability to continue to learn
  
• A capacity to love and an ability to nurture
  
• An ability for effective communication

Dimensions of Wellness

A ‘wellness lifestyle’ is associated with good physical health, emotional stability, healthy relationships with family, friends and peers as well as productivity and satisfaction in one’s work and workplace.

Social aspect: This emphasises the interdependence with others, making friends and having meaningful, happy, satisfying and stable relationships with others. Social wellness promotes the idea that it is helpful to contribute to the common welfare of our community than to think only of ourselves. The basic tenet is that it is better to live in harmony with others and our environment than to live in conflict with them.

Physical aspect: This refers to deliberate choices for a life style that includes adequate physical activity, well balanced diets and good fitness regimen that will help to achieve and maintain optimum body health and well being. Making healthy lifestyle choices that affect health and quality of life for the present and future is crucial.

Intellectual aspect: This encompasses the extent to which one engages in creative, stimulating mental activities. An active mind is crucial for overall wellness. Being open to new ideas, thinking critically, being creative and curious, and being motivated to master new skills are the keys to intellectual wellness. An ‘intellectually well’ person uses the resources available to expand his/her knowledge to improve skills along with sharing with others. Benefits include improved job performance, better problem solving, more knowledge and a better chance at being successful in life.

Occupational aspect: This is concerned with the satisfaction gained from one’s work and how much one feels enriched by the work. The satisfaction gained is related to a person’s attitudes about work, the sense of direction and goals, and a feeling of achievement. Achieving personal satisfaction and enrichment in one’s life through work is required for adults to have a sense of comfort and satisfaction in life. Wellness at the workplace is being increasingly focused upon by employers to ensure better employee health, well-being and productivity.

Emotional aspect: This is closely related to the degree of awareness and acceptance that one has of one’s feelings. It includes the extent to which one feels positive and enthusiastic about one’s self and life, the capacity to appropriately handle and express one’s emotions (both positive and negative), how one copes with stress as well as being able to realistically assess one’s limitations. Emotional well-being allows an individual to recognise, understand, experience and express a full range of emotions. In adulthood particularly; living with chronic illness such as heart disease or cancer has mental health implications.

Stress can affect the individual in several ways—contribute to irritability, heart burn, headaches, heart disease and perhaps cancer. Stress cannot be completely avoided. However, one can learn to cope with stress (see Figure 2 in this chapter). Health promotion activities can positively impact overall health and well-being.

Spiritual aspect: This addresses one’s continuous involvement in seeking meaning and purpose of life and living, in general in human existence itself. Spirituality generally relates to better mental health, greater well-being and higher quality of life. Physical health and medical outcomes may also be affected. Spirituality can help persons to cope with problems even related to physical health.

Environmental aspect: This deals with the interaction and interdependence between humans and the environment. Awareness of the critical role the environment plays in our individual wellbeing and that all human activity affects the environment is required. Environmental degradation and destruction by human beings is jeopardising the availability of natural resources leading to several major problems that will compromise the quality of human life.

Financial aspect: This focuses on informed decision-making and learning how to manage financial resources wisely, save, invest, and plan for the future. In a monetised society (a society that functions largely on monetary transactions), adequate financial resources are required to achieve health and well-being. Every person has to work hard and be productive to have sufficient finances, not only at the micro-level i.e., individual and family, but also at the macro-level i.e., community, region, state and national levels.

15.5 Stress and Coping with Stress

Stress is unavoidable in daily life and has both positive and negative connotations in the personal and professional roles. Some stress can motivate and energise one to perform better and be more efficient. When stress has a positive effect, it is termed ‘eustress’, when stress adversely affects performance, physical and mental health, it is known as ‘distress’. At the simplistic level, any one can assess oneself through the activity given below.

Every human being, young or old, male or female, wealthy or poor, in good or poor health will benefit by learning to cope with stress in order to enhance well-being and improve their quality of life. There are various stress management techniques which are indicated in Figure 2. The decision to use one or more techniques is a matter of individual choice.

Figure 2: Simple techniques to cope with stress

Research shows that persons who take care of themselves and manage their lifestyles are healthier, more productive, have fewer absences from work, and make fewer demands for medical services. It is not medical care alone, rather consistent self care which promotes better health and an improved quality of life.

Note for teachers about BMI classification

In the recent years, there has been a growing debate on whether there are possible needs for developing different BMI cut-off points for different ethnic groups due to the increasing evidence that the associations between BMI, percentage of body fat, and body fat distribution differ across populations and therefore, the health risks increase below the cut-off point of 25 kg/m2 that defines overweight in the current WHO classification. There had been two previous attempts to interpret the BMI cut-offs in Asian and Pacific populations, which contributed to the growing debates. Therefore, to shed light on these debates, WHO convened the Expert Consultation on BMI in Asian populations (Singapore, 8-11 July, 2002). The WHO Expert Consultation concluded that the proportion of Asian people with a high risk of type 2 diabetes and cardiovascular disease is substantial at BMI’s lower than the existing WHO cut-off point for overweight (= 25 kg/m2). However, the cut-off point for observed risk varies from 22 kg/m2 to 25 kg/m2 in different Asian populations and for high risk, it varies from 26 kg/m2 to 31 kg/m2. The Consultation, therefore, recommended that the current WHO BMI cut-off points (Table 1) should be retained as the international classification. But the cut-off points of 23, 27.5, 32.5 and 37.5 kg/m2 are to be added as points for public health action. It was, therefore, recommended that countries should use all categories (i.e. 18.5, 23, 25, 27.5, 30, 32.5 kg/m2 , and in many populations, 35, 37.5, and 40 kg/m2) for reporting purposes, with a view to facilitating international comparisons. This chapter has provided you a fair idea about the importance of good health in adulthood, and the way of maintaining a sense of well-being. You would agree that having adequate financial resources would be an important component of wellness for an adult. However, simply possessing money is not enough. How one manages it and plans its use is equally significant for the optimal benefit of this resource. These issues will be addressed in the next chapter – Financial Management and Planning.

16 Financial Management and Planning

16.1 Introduction

(i) Financial management in the context of a family simply means management of finances. Finances are all types of income available to a family which include salary, wages, rent, interest, dividends, bonus, retirement benefits and all other forms of monetary receipts. Planning, controlling and evaluating the use of all these types of incomes is called financial management. Its purpose is to give the family greatest satisfaction from the resources at hand.

The quality of living that can be exchanged for financial resources is dependent not only on how much income is available, but more importantly on the regularity and stability of income. Therefore, it is important to learn the skill of managing money as a resource. This chapter will deal with the types of family income, management of income and the steps in making family budgets.

(ii) Financial planning is a component of financial management. The term budget is often used for the planning stage in financial management. When families make budgets, they see to it that the family income is used in a manner that fulfills all the present needs of the family members and also takes care of the long term goals of the family. Thus families are able to achieve their objectives by optimising the use of their resources. In addition, financial planning minimises wastage of money on non-essentials, thus making families save a part of their income for future use. This is, however, possible when the family monitors its financial plans and evaluates the plans from time to time. Commitment of family members towards the success of the financial plan is very important for it to show any results.

Management is using what you have (resources) to achieve what you want (goals and objectives). Family resources are the resources that are available to the individual or the family at a particular time, which help them reach their family goals. Family resources include human resources such as knowledge, skills, health, time and energy; material resources such as housing, money and investments; and community resources such as the library, parks, community centres, hospitals etc. In order to ensure maximum utilisation of resources it is important to manage them well.

A family is a consumption unit while being a social unit, and its purpose is to manage the finances of the family for the well-being of its members. Money is one of the important family resources. A family cannot lead a comfortable life without sufficient money. Managing money effectively to meet present needs and future goals is a learned skill. So let us understand what we mean by family income.

16.2 Family Income

Family income means the sum total of the income of all types and from all sources of all the family members in a given time period. It can be annual, monthly, weekly or daily income. However, for official purposes, it is considered as the annual income in a financial year which is generally from 1st April to 31st March of the next year.

Income may be in the form of

• Wages
  
• Salary
  
• Profits from business
  
• Commissions
  
• Rent from properties
  
• Interest on cash loans
  
• Dividends
  
• Pensions
  
• Gifts
  
• Royalties
  
• Tips and donations
  
• Bonus
  
• Subsidies, Charities etc.
  

Types of family income

There are three types of family income.

Before we go into the details of different types of family income, let us understand what is money and its functions.

Money is what money does. Two most important functions of money are:

• Serving as a medium of exchange, and
  
• Measurement of value
  

Thus money is “anything which is generally acceptable in exchange of commodities and in terms of which the value of other commodities is determined”.

Importance of money

• Money serves as a medium of exchange, thus doing away with the problems of spending time for exchange to materialise.
  
• Money serves as a standard of value, i.e., a common denominator in terms of which the value of all other commodities is expressed.
  
• It works as a standard of deferred payments facilitating savings and investments, which are the basis for capital formation, and hence for better standard of living.
  
• Storage in terms of money is durable for long time periods, facilitating accumulation for investment in production and improved standard of living for the family.
  

(a) Money Income is the purc-hasing power in rupees and paisa that goes into the family treasury in a given period of time. It comes to the family in the form of wages, salary, bonus, commission, rent, dividends, interest, retirement income, royalties and any other allowances to any member of the family. Money income is converted into goods and services required for daily living, and often a part is diverted into savings for delayed use or for investment purposes.

The frequency and pattern of flow of money income varies from family to family. For example in rural areas agriculture is the main occupation. The income of a farmer is not regular but she/he earns money when she/he sells the crop which may be twice in a year–the rabi and the kharif crops. In contrast, a person having a job will have regular income every month.

(b) Real Income is defined by economists as a flow of commodities and services available for satisfaction of human wants and needs over a given period of time.

This definition has three important points, namely:

• Real income is a flow of goods and services, it is not stagnant.
  
• It consists of goods and services which might or might not be available with money, e.g., produce from your own land, services of a household.
  
• There is a time period involved – it may be a month or a year.
  

Real income is of two types- direct income and indirect income

1. Direct Income – consists of those goods and services available to the family members without the use of money. For example, services rendered by family members, like cooking, laundering, stitching, maintaining kitchen garden, etc. A house which is fully paid for and community facilities like parks, roads, libraries also come under direct income.

2. Indirect Income – those material goods and services which are available to the family only after some means of exchange (ordinarily money) has been obtained, e.g. use of money to buy good quality vegetables because it involves one’s skill and ability to select.

(c) Psychic Income is the satisfaction that results from the ownership and utilisation of goods and services. It can also be defined as the satisfaction derived from real income. It is difficult to quantify psychic income in terms of rupees. It is a form of hidden income. It is intangible and subjective and the most important in terms of quality of living.

16.3 Income Management

Income management may be defined as planning, controlling and evaluating the use of all types of income. Its purpose is to simply get the greatest satisfaction from the resources at hand.

No two families, even though they have identical incomes, will have identical needs and desires. Thus every family must devise their own plan of expenditure keeping in mind their goals, needs and desires. For efficient income management it is essential that families recognise and analyse all resources available to them.

16.4 Budget

Budget is the most common planning device for the use of money. A budget is a plan for future expenditure. It represents the first step in the managerial process as applied to money. Its success depends upon

• its being realistic and flexible.
  
• suitability to the group for which it is prepared.
  
• quality of the control and evaluation steps which follow.
  

A family budget gives in detail the income and the expenditure of a family for a month or a year. It mentions all the sources of income during the period and also all the items of expenditure under different headings, such as food, clothing, housing, entertainment, travel, education, health and medicine and savings.

Steps in making a budget

There are mainly five steps in making a budget. They are as follows:

(i) List the commodities and services needed by the family members throughout the proposed budget plan. Group the related goods and services together. The following grouping may be helpful:

• Food and related costs
  
• Housing
  
• Household operations – fuel, utilities
  
• Education
  
• Transportation
  
• Clothing
  
• Income tax
  
• Medical
  
• Personal allowances
  
• Miscellaneous – recreation, house furnishings
  
• Provision for future – saving, retirement
  

(ii) Estimate the cost of the desired items totaling each classification and the budget as a whole. General market trends must be considered while making these estimates. For example, if prices are showing an upward trend, sufficient margin should be allowed to cover such increases.

(iii) Estimate total expected income. It is helpful to list income under two headings – assured and possible income. The budget should ensure that necessities are taken care from the assured income and the ‘nice but not necessary’ items can be obtained from possible income.

(iv) Bring expected income and expenditure into balance. Sometimes expenses are more than income. There are two ways to bring them into balance. One can either increase the income (for example by, taking up an extra job/work) or cut expenditures (less frequent outings or less expenditure on festivals).

(v) Check plans to see that they have a reasonable chance of success. The plans are checked in light of the following factors:

• The needs of the family have been met.
  
• The budget allows for emergencies. A joint fund may be kept aside for emergency period.
  
• Solvency is assured. Solvency is the ability to pay bills or debts as they fall due.
  
• The national and world-wide conditions have been considered (e.g., global economic recession).
  
• The long term goals of the family are recognised.
  

Advantages of planning family budgets

• Planning enables a family to take an overview of the use of their income.
  
• Amounts allocated to various categories can be studied in relation to total income.
  
• The budget helps families use their income to first attain those goals which they consider most important. Spending without a plan frequently results in wastage of income.
  
• Family members are less likely to be swayed, as they can make rational decisions which are reflective of long term goals of the family.
  

16.5 Control in Money Management

After planning, controlling is the next step in money management. Control in financial management is usually of two types: checking to see how well the plan is progressing and adjusting wherever necessary.

Checking is important as it tells how one’s plans are progressing and where adjustments are needed. There can be two kinds of checks:

(i) Mental and mechanical checks: Mental checks are usually established by breaking the allocations into units which can be related to actual expenditures. For example, Rs. 1000 may appear to be a large amount to a student, but when one realises that one must purchase a pair of shoes, a new dress for a festival and a few books all at one time, it is obvious that one must take extreme care in the selection and the price in light of the total money available. Thus, in mental checking one visualises clearly the items a specific amount must cover.

A mechanical check is one in which you set aside a certain amount of money in cash to be used for a particular item. For example, many homemakers have a food purse in which monthly allocation for food is kept. All food expenses are carried out from the money in this envelope. Quick disappearance of the money shows how rapidly the money is being spent.

(ii) Records and accounts: Records and accounts show the distribution of money after expenditures have been made. Such records can be quite casual, such as keeping everyday written account or receipted bills, or they can consist of formal and detailed accounts. For a family the purpose of records is to show the distribution of money which has been spent and to compare the amounts spent with the amounts allocated to a particular group of items.

Advantages of record keeping for a family

• Monthly expenditure can be compared with the spending plan and show us where adjustments must be made to avoid excessive expenditure.
  
• Helps in identifying those categories or sub-categories where expenditure is too high or too low. This in turn enables us to make better future budgets.
  
• Some record keeping methods need bills and receipts to be maintained. Thus a proof of payment is at hand in case of a poor product or service if one wants to lodge a complaint.
  

Single sheet method is a simple and flexible method of record keeping. The record of expenses are kept on a single sheet (see Figure 1).

Adjusting the plan is very important to keep it on track. Adjustments may be needed if the original planning was poor because of factors beyond the family’s control like emergencies, family going on an unplanned shopping spree or inadequate checking mechanisms which do not tell the family that there is a considerable gap between the plan and its execution.

Evaluation is the final step in money management. The satisfaction derived from expenditures is one of the most important means for determining the success of a budget. Evaluation is done in light of specific goals such as obtaining fair value of money spent, being able to pay bills when they fall due, providing for future and improving economic status of the family.

Records of expenditures may be kept on a single, double or multiple sheets. This method is simple and flexible. Also the sheet can be tacked on the back of a door or cabinet with a pencil hanging nearby, which makes it convenient. Although the double and multiple sheet methods can be more adequate than single sheet, yet if the single sheet is well worked out it may include essential data. Consider the following example SINGLE SHEET METHOD FOR THE MONTH OF OCTOBER 2008 Category Amount Allocated Amount Spent Total Amount Spent 1. Food Grocery Milk Fruit/ veg. Meat – poultry Eating out 2. Housing Rent Repair Loan 3. Clothing Children’s clothing Adults’ clothing School Uniform 4. Education Fees Notebooks Books 5. Medical 6. Any other

Figure 1: Single sheet method

After having learnt about the family income and its management by planning, controlling and evaluating we have a good idea about what we need to do to make optimal use of our resources. The next step would then be to learn about savings and investment of money so that we can make good use of it in future.

16.6 Savings

Savings means keeping aside a part of your money or other resource for use in future or for further production. Savings are important for a family to take care of their future needs. Savings are also important for any economy to survive and grow as savings lead to capital formation and accumulation. This happens when savings are put to productive use by starting a business or depositing money in banks and financial institutions which mobilise public savings and use them for productive use.

Savings of a family depend on the ability to save and willingness to save. Ability to save depends on per capita income. Higher income families have a higher potential to save compared to low income families who have little to save after taking care of their basic needs. Willingness to save depends upon the long term goals of the family and how willing they may be to sacrifice some luxuries in the present to take care of the future.

Saving money is not easy. It takes discipline, planning, co–operation and hard work on the part of family members. But saving money is very important for family security and happiness. Saving for saving’s sake is futile. Savings have meaning only when the purpose is well-planned and understood by all family members and the money wisely invested for future use.

16.7 Investment

Investment implies using the money for further production. If savings are put under the folds of a saree or kept hidden in a pitcher, it is not going to result in investment. Savings have to be put to productive use in the economic sense to result in investment. Investments may be in two types of assets – physical assets and financial assets. Savings, if put into bank accounts, post offices, or financial credit societies institution, in shares and securities, insurance policies etc. lead to formation of financial assets. They provide financial security to the family and are productive in economic terms. Savings in physical assets means using your savings to buy land, property, house, gold, household durables etc. This kind of investment is not productive in the economic sense of the term and does not result in capital formation. However, it usually has long term positive returns.

Principles underlying sound investments

Families spend a lifetime accumulating savings. These savings must be invested wisely to give the family good returns and ensure that the money is safe and available to them when they need it.

Let us now discuss the principles underlying sound investments.

(i) Safety of the principal amount: The principal itself has to be safe if it is to earn interest or dividends. This principal is the most important factor for sound investing. Safety can be ensured by

• Owning securities in both government and private sectors like National Savings Certificate (NSCs), Public Provident Fund(PPF), Kisan Vikas Patra (KVPs), fixed deposits in banks
  
• Investing in companies in different geographical zones
  
• Owning shares and bonds in different companies
  
• Studying the market reputation of the issues of the securities
  
• Varying the kind of securities purchased – agricultural land, real estate, stocks, bonds, fixed deposits etc.
  
• Understanding prevailing phase of business cycle
  

(ii) Reasonable rate of return: In general, the higher the rate of return on an investment, the greater the risk i.e., safety of principal and rate of return are inversely related. To some people, particularly those depending upon investments as their major source of income, regularity of income is more important than a higher but fluctuating return. This is determined by the selection of securities. Therefore, before investing money one should compare the rate of interest and the associated risk under various schemes and options.

(iii) Liquidity: It is the ability to convert the securities into cash without sacrificing value. The more liquid an investment is, the higher is its price, or in other words, the lower the return to the investor. Hence income and liquidity must be balanced.

(iv) Recognition of effect of world conditions: Changes in business trends will affect both the amount of protection needed, the ease of providing it and the methods chosen to provide it. Considering the long time business trends, a family must recognise the effect of their savings on the entire economy. Their willingness or unwillingness to invest in business enterprises at various stages in the cycle may well have an effect in reducing the extremeness of the cycle.

(v) Easy accessibility and convenience: While choosing an investment option for family funds, one must consider the knowledge required for its success. A family may choose an investment which might result in loss simply because they did not foresee the problems involved in the management of security or property acquired.

(vi) Investing in needed commodities: The date on which an investment is to mature is important for a family that plans to have funds available for a known future need. Therefore, while investing money, families should purchase securities of lengths and durations so that they mature close to the time of the envisaged need or needs, e.g., for the child’s higher education.

(vii) Tax efficiency: Investments should be made in those instruments which lead to tax saving. A number of provisions in the Income Tax Act can be used to save taxes. Investment in insurance policies, Employees Provident Fund, PPF etc. have built-in tax rebates with a specific ceiling limit.

(viii) After investment service: While selecting an investment instrument, customer care or customer service must be a critical decision-making factor. Good customer care includes easy encashability of securities, good communication network, timely dispatch of interest or dividend warrants, timely disbursal of the due amount after completion of investment period, keeping the customer posted about changes in the policies, interest rate etc. A customer-friendly company provides the needed support and protection to the investor as and when required.

(ix) Time period: The “lock in” period is a critical aspect to be considered before deciding on an investment. The longer the period of investment the higher is the rate of return. For example in most fixed schemes the rate of interest is higher for long-term deposits compared to short-term deposits. Thus the investor must choose between a higher return with a longer waiting period or a comparatively lower return for a short lock-in-period, based on the needs and requirements of his/her family.

(x) Capacity: One should not invest beyond one’s capacity so that the investments can be free of undue hardships. It is important to balance present needs with future needs and security.

16.9 Savings and Investment Avenues

Following is the list of saving and investment options which are available to an Indian consumer:

• Post Office
  
• Banks
  
• Unit Trust of India
  
• National Savings Scheme
  
• National Savings Certificates
  
• Shares and Debentures
  
• Bonds
  
• Mutual Funds
  
• Provident Fund
  
• Public Provident Fund
  
• Chit Fund
  
• Life Insurance and Medical Insurance
  
• Pension Schemes
  
• Gold, House, Land
  

16.10 Credit

Inspite of the fact that families save and invest money income they have to sometimes use credit to meet their needs or obligations. That is, families make use of credit to avail of goods and services whose initial cost is too high to bear at once. The word credit comes from the Latin word ‘CREDO’ meaning ‘I believe’. Credit means getting money, goods or services in the present and paying for them in the future. In reality, it is a process of postponed payment, a privilege for which we have to sometimes pay a very high rate. At any given time the use of credit increases purchasing power and thus makes possible the provision of more goods or services than the cash on hand would allow. Families should understand the nature and operation of credit since repayment of the amount borrowed, together with interest for its use, must eventually be made.

Need for credit

Families use credit to meet needs or obligations. The need may be real or imaginary. If the initial cost of a commodity seems too large to save before the purchase is made, families borrow money to possess the commodity immediately; for example, land. The cost of the good is spread over a long period of time and the family can have the advantage of using the good during the payment period. Another reason for borrowing is to meet family emergencies like sickness of a family member. Families also borrow to meet obligations like marriage of children or performing rituals during death of a member. A self-supporting and self-sufficient family can always use credit in emergencies and do so with a feeling of confidence.

A lender will make a loan only when she/he believes that the borrower will repay the money she/he borrows. The lender may a bank or any other financial institution. Their decision to give credit to individuals and families is governed by 4C’s, which are mentioned below.

4 Cs of credit

Character means willingness and determination to repay a loan as agreed, even though it is at greater cost and inconvenience than the borrower anticipated.

Capacity means the ability to meet an obligation when it is due. Ordinarily capacity depends upon income. It is important to understand that the capacity of family to repay a loan depends not so much upon total income as upon the available margin over and above necessary expenses. The capacity of a family to repay a loan is determined by the difference between what the family receives and what it spends.

Capital means net worth. A family’s capital is determined by the difference between what it owns and what it owes. The existence of this capital provides a margin of safety for the lender, since if the family’s income proves to be inadequate to repay the loan, it can draw upon its invested capital.

Collateral consists of specific units of capital which are pledged as security for a given loan. Usually these units are placed in the possession of the lender with the understanding that if the borrower fails to pay the loan as agreed, the lender is to reimburse himself in so far as he can from the sale of the pledged collateral.

Commercial banks, cooperative banks and agricultural banks, credit unions etc. are the main source of taking credit. One can also take credit from self-help groups of which one is a member. The members of this self-help group contribute some money every month and make a corpus amount. From this credit is given to the needy member based on her/his requirement and repaying capacity. These groups have members known to each other and hence no collateral is needed and the interest rate is nominal.

Before using credit the family should consider not only satisfaction gained by possession of the good or service but also future adjustments in family budget imposed by repayment of the loan. Managing credit includes determining when to use credit and when its use has become excessive. Credit is a useful resource when handled with an understanding of its potential and its cost.

If used indiscriminately credit can be disastrous for a family. Avoiding use of credit and taking credit at the lowest possible cost should be the first target for most families.

Let us conclude this chapter with an understanding that money and other financial resources can be multiplied and optimally used if certain measures, mentioned in the chapter, are adopted. As adult members of family, most people have to take care of many things. One such area in daily living is care of clothes and fabrics in the home. If fact, one can learn about the care of one’s clothes from a young age. Let us read about this in the next chapter.

Practical 16

Financial Management and Planning

Plan a budget for any festival celebrated in your school. One example under each heading is given.

No. of students: 30

No. of teachers: 5

S.No.	Item		Cost (Rs.)
1.	Venue arrangement
	Decoration
	a)	Flowers	100.00
	b)
	c)
	d)
	e)
Sub total
2.	Food
	a)	Sweets (Prasad)	200.00
	b)
	c)
	d)
Sub total
3.	Stationery
	a)	Coloured paper	200.00
	b)
	c)
	d)
Sub total
4.	Miscellaneous
	a)	Transportation
	b)	Costumes
	c)	Gifts
	d)
	e)
	f)
Sub total
Grand total

Note: Strike out that which is not applicable.

Practical 19

Study of Adulthood

Theme: Study of one female and one male adult in the age range 35- 60 years with respect to

(i) health and illness

(ii) physical activity and time management

(iii) diet behaviour

(iv) coping with challenges

(v) media availability and preferences

Tasks:

1. Identify a female and a male adult in the age range 35-60 years

2. Collect information with respect to the above aspects by asking them specific questions

3. Analyse similarities and differences in responses and assess whether there are differences in responses due to age or gender.

Conduct of the practical: After identifying the two persons (they could be persons in your family or neighbourhood), ask them the following questions.

A. Questions related to health and illness

1. Have you had any health problem (s) or illness (es) in the past few years?

2. What treatment did you use? Did you seek medical help or did you use home remedies?

3. How did you manage the illness – by your self or with the support of family members or neighbours?

4. What do you do to keep yourself healthy?

5. Do you have health insurance?

B. Questions related to physical activity and management

1. Briefly describe your routine for the day (from the answer you get to this question, try to find how physically active the person is during the day)

2. What strategies do you use for accomplishing all the tasks that have to be done? Do you schedule specific activities for specific periods of
the day? Do you combine activities of a similar nature and do them together (the answer will give you insights about how the person manages time)

C. Questions related to diet behaviour

1. What are the foods that you prefer to eat?

2. Are there any foods which you dislike?

3. In your family are there any foods avoided because of religious or social reasons?

4. What are the major influences on your food behaviour?

D. Questions related to coping with challenges

Each one of us faces one or the other challenging situation in our lives:

1. Can you state some challenging situation that you have had to face?

2. What emotions did you experience as you were passing through the situation?

3. How did you cope with this situation – were you alone in the situation or there were members of the family to help you cope?

4. Do you think that you could have responded differently than the way you did?

E. Questions related to media availability and preferences

1. Which media is available to you for reading/viewing – newspapers, radio, television, films?

2. Which media do you prefer and why?

3. What programmes or items do you like to watch/read in your preferred media?

4. When do you read/watch your preferred media?

Record your finding with respect to each of the above aspects using the following type of tables.

A. Health and illness

S.No.	Health problem/illness	Treatment used	Self-management of illness/ support of family or others	Measures to maintain health	Health Insurance
Adult woman
Adult man

B. Physical activity and time management

Physical activity and time management: Adult woman

Time (in hrs)	Activity

Physical activity and time management: Adult man

Time (in hrs)	Activity

Comment on the time management strategies used, based on the principles you have studied.

Adult woman

_____________________________________________________

_____________________________________________________

_____________________________________________________

_____________________________________________________

_____________________________________________________

_____________________________________________________

Adult man

_____________________________________________________

_____________________________________________________

_____________________________________________________

_____________________________________________________

_____________________________________________________

_____________________________________________________

C. Diet behaviour

S. No.	Foods preferred	Foods Disliked	Foods avoided due to religious or social reasons	Factors influencing food behaviour
Adult woman
Adult man

D. Coping with challenges

Describe in the following space the challenging situation faced by the two adults and their ways of coping

Adult woman

___________________________________________________

___________________________________________________

___________________________________________________

___________________________________________________

___________________________________________________

___________________________________________________

Adult man

___________________________________________________

___________________________________________________

___________________________________________________

___________________________________________________

___________________________________________________

__________________________________________________

E. Media availability and preferences

S.No	Media availability	Media preference	Programmes/items/columns preferred	Time for watching /reading media
Adult woman
Adult man