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Can waste management principles help you to manage money better?

The convergence of finance with waste management may seem preposterous and improbable, but lately the concept of ‘Prudent Money Management’ is generating palpable interest among industry savants- conventional and modern alike.

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Last Updated: Jan 17, 2020, 12.04 PM IST
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Shifali Satsangee
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By Shifali Satsangee

For decades now, ‘Waste Management’ has been confined to the precincts of reducing/reusing/recycling physical waste. With the advent of innovative financial and accounting practices like environment management accounting and activity-based cost management techniques, it is only fair that one questions themselves while wasting a precious and finite resource – Money.

The convergence of finance with waste management may seem preposterous and improbable, but lately the concept of ‘Prudent Money Management’ is generating palpable interest among industry savants- conventional and modern alike.

Prudent money management leads to ‘Smart Consumption’ which is one of the ways to manage waste and leads to ‘Sustainable Living’. Therefore, there is a positive and direct correlation between managing money well and sustainability of our resources.

Fiscal prudence is a concentrated step towards tapering the quantum of money that individuals irrationally allocate to activities that add no substantive utility to their lives. It is here that managing one's habits and behaviour plays a significant role.

Smart Consumption
Smart Consumption refers to a meticulous spending plan which reflects not only price and quality preferences but also social and moral values, for organic and environmental friendly products.

Monetary Sustainable Practice Principles:
  • Allocation
    This requires allocation of monetary resources in a way which leads to utilisation of fewer resources and reduced consumption. The dual benefits are (i) monetary savings (ii) reduction in the ecological footprint as fewer resources are consumed.
  • Social Consumption
    Pooling of finite resources often leads to monetary as well as environmental benefits. Just like economies of scale helps the production side of an economy, the consumption side of the economy benefits from social consumption rather than isolated consumption.
  • Work Hard, Spend Smart
    Humanity today faces an existential crisis due to unprecedented climate change, the root cause of which are wasteful activities and wasteful procurement of goods.
Counter Climate Change measures and Waste Management have hitherto been confined to eco-friendly processes of manufacturing and disposal.

But beneath the veneer of boomtown prosperity, cracks have begun to appear and the existing supply side measures, which all believed would provide an umbrella of stability, has proved to be a straight jacket.

It is expedient that reparations be made on the procurement/demand side of the economy and not just the manufacturing/supply side.

When society at large decides to appropriate and attribute finite monetary resources in such a way that only environmentally sustainable products, from procurement to disposal are chosen over other alternatives, there will be a fundamental shift in the supply side of the economy to cater to such demand.

Thus it is apt to conclude that when waste management principles and fiscal prudence are tied with the same thread, it not only leads to monetary gain but also helps to breed a sustainable living environment not just for ourselves but for the generations to come.

Beware of little expenses; a small leak will sink a great ship”
~ Benjamin Franklin.

(Shifali Satsangee is the founder of Funds Ve’eda, a mutual fund advisory firm, based in Agra)
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)

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