Why Money Needs To Grow And Why We Must Move Beyond Stashing It In Cupboards

Last week, we began by asking why women so often remain silent about money. We agreed that this silence must end and that your decisions must carry weight. But once you hold the pen in your hand, what comes next? The next step is to understand that money cannot simply be stored. It has to grow.   

Why Saving Money Is Not Enough

For generations, women have taken pride in saving. Our grandmothers slipped notes into the folds of sarees and hid them in steel containers, our mothers managed household budgets with quiet reserves of cash in almirahs, and even today, many of us tuck away money in purses for a rainy day. These habits once gave women a sense of security at a time when banks were not easily accessible. But today, keeping money idle is no longer a protection. It is erosion.   

Think of it this way. Ten years ago, ₹500 bought you a full bag of groceries. Today, the same ₹500 hardly fills half. A gas cylinder that cost ₹350 not long ago now costs close to ₹1,000. School fees that were ₹20,000 a year are now closer to ₹50,000. This steady rise in prices is called inflation. In simple words, it means the money in your hand looks the same, but it buys less with every passing year.   

This is why simply saving is not enough. Money kept at home in cupboards or even left in a low-interest savings account does not protect you from inflation. If money lies idle, it is shrinking quietly.   

Better than keeping money in a cupboard is placing it in a bank. At least in a savings account, it earns some interest. And if you put it in a fixed deposit, you may earn a little more. This feels safer. The number in your statement or mobile app goes up instead of staying the same. That is progress.   

But pause here and think. Who decides how much interest the bank gives you on your deposits? Why is one year’s fixed deposit rate 5.5 per cent and not 8 per cent?   

Why Your Money Must Now Grow

This is where the Reserve Bank of India quietly enters your life. You may have often seen headlines about the RBI announcing its “monetary policy” or changing “interest rates.” Perhaps you skipped the article, thinking it was too technical. But those headlines are really about the story of inflation and how it shapes your everyday life. As this column continues, you will discover that these heavy terms are not as complicated as they sound. You will soon learn to read that news with fresh eyes and understand exactly why it matters to your money.   

Every few months, the RBI sets something called the repo rate, which is the rate at which it lends money to banks. When the RBI changes this rate, banks respond. Loan rates change. Deposit rates change. And with that, your EMIs and your fixed deposit interest change too.   

But here is where you must pause again. If your fixed deposit pays you 5 per cent, but prices are rising at 6 per cent, are you really better off? On paper, your balance is higher, but in real life, your money buys less. Add to this the taxes you pay on the interest earned, and most times your fixed deposit barely beats inflation and often does not. With India’s current inflation hovering around 5.5 per cent, you can see how narrow the margin really is.   

This is why saving alone cannot be the end goal. Money must grow faster than inflation. 

This is the bridge we must cross now. From being proud savers, we must become smart growers. It is not enough to keep money safe. We must ensure it grows faster than prices. That is the only way to protect the effort behind every rupee you set aside. 

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Exercise To Grow Money 

Here is your exercise for the week. Write down where your money is kept: cash at home, balances in savings accounts, fixed deposits. Against each, note the interest rate. Then think of how prices have risen around you: school fees, groceries, medicines. Ask yourself: is my money truly growing faster than these prices, or is it falling behind?   

This simple awareness is the foundation for everything we will learn next. Because until you see that saving alone is not enough, you will never be ready to explore how to invest.   

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Laxmi is not only a preserver. She is also a creator. You have always preserved. Now it is time to create.   

Next week, we will pause before we invest and ask a simple question, do we truly control the money we already have? We will talk about what it means to really own your bank account, and why understanding what you sign is just as important as earning or saving.   

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