Are You An Ant or Grasshopper? Money Savings Lesson

The time value of money is one of the most important lessons of financial management. Yet, most people often overlook this until it is too late. People delay getting life insurance, they start investing really late in their life, they start savings insurance late in their life, and a list of financial blunders goes on. The people end up facing financial strain later in life. There is a story from your childhood that wonderfully dictates the behaviour of most people around you.

The ant and the grasshopper story

You must have heard this story from your teacher, your parents and even your grandparents. But you must have been too little to remember the details and the important financial lessons that it imparts. Therefore, here is a quick summary of the story.

During the summer, a grasshopper was enjoying his life singing and dancing around in the meadows. Then suddenly, he saw an ant carrying and moving large chunks of food. The grasshopper asked the ant to forget about the food and come enjoy the sunny day with him. The ant simply refused and reasoned that he must prepare for the bleak winter. The grasshopper chuckled and thought that the ant was a fool for not enjoying the day.

When the winter arrived, the grasshopper started to struggle. He tried to find food for himself, but there was nothing available out there. He started wandering the meadows asking others to lend him some food. That is when he came to the house of the ant. The grasshopper was surprised to see the ant has a house fully stocked with food and grains. The ant saw the grasshopper struggling and decided to be the kind person. The ant went on to share his food with the grasshopper and eventually saved him.

Moral of the story

The moral of the story is that one must be proactive instead of being reactive to the situation around them. The story also teaches amazing lessons on saving money. Money is not only a medium of exchange used to instantly gratify your own desires. That same money can be used to pave the path for retirement and wealth creation. The story also teaches you to be a kind person and help people facing difficult times.

What are financial lessons to learn from the ant?

• The ant was smart and worked hard during the days when food was plenty available. You must learn to work diligently and develop a healthy saving habit.

• The ant decided to safeguard his future first instead of indulging in short term gratifications. You should also safeguard your future from the uncertainties of life. You can buy savings insurance with the option of life cover to protect yourself from the uncertainties of the future.

• During the summer days, the ant was busy preparing for the winter. The winter here alludes to retirement. Just like the ant, you should start setting up a retirement corpus from your early 20s. You can subscribe to any money-saving plan with the option of it turning it into a monthly income plan during your retirement.

• The ant decided to be proactive. This essentially means that you should prepare an emergency fund even before there is a need for it. You should at least save 6 months of expense in a separate account. There is a savings plan in India that will help you create a fund for your emergencies. 

How can you become financially independent like the ant?

As you read above, the ant spent a warm and cosy winter, unlike the grasshopper who was hungry and cold.

To keep yourself well-fed and cosy during the tough times, you will need to have an emergency fund and have a regular investing habit. The emergency fund will help you deal with unexpected rainy days. You will be able to meet the emergency expenses without having to put a dent in your monthly budget.

After you have enough for your emergency fund, you must start investing in either savings insurance or other instruments such as equities and debt funds. This investing habit will help you create a massive corpus, setting yourself for retirement. You should also avail your life insurance policy to protect the financial future of your family. The are several savings plan in India which offers multiple rider^# options to enhance the protection offered by them. 

Conclusion

The story is not only for you to understand and start saving. You can also tell the ant and the grasshopper story to your children and teach them about the time value of money. You can also educate them on the difference between the long term need and short term wants. The earlier you try to inculcate a good investing and savings habit, the better off they will be in the future.

Tata AIA savings plans allow you to cultivate a savings habit that will help you build a retirement corpus. The money-saving plans also offer life insurance coverage, protecting the financial future of your loved ones.

The protection offered by the plan can also be enhanced through multiple rider^# options. Tata AIA plans also offer wonderful benefits at a significantly lower premium. You can check more about their plans on our official website.

L&C/Advt/2021/Jul/1153