Recession. Layoffs. Salary cuts. These are the words that seem to be ruling everyone's life nowadays.
Recession. Layoffs. Salary cuts. These are the words that seem to be ruling everyone's life nowadays. And if you too have become a victim of the economic downturn and are repaying the home loan on your recently bought flat, then we sympathise with you.
Even the slightest bit of salary cut can wreak havoc with your finances. The only way out is to be prepared to stay afloat. Here are some tips to save enough and repay your loan like you did before recession:
>>u00a0Cut down on entertainment: It's perfectly fine to chill on weekends; it's your due after a gruelling week. But when you count the monies you spend on going to a movie in a multiplex, bowling in a mall and eating in plush restaurants, you'll understand what we mean.
A study reveals that during recession book sales go up. And why not? Pick up a good book and enjoy reading it. You'll notice that your ATM withdrawals have lessened and you have money in your wallet for long periods.
>>u00a0Restrict impulsive buys: If your favourite pass time is prowling the corridors of a mall, stop it asap. Just one more shirt/kurti; the iPod you are dying to buy; birthday is two months away, so why not shop? Needless to say, this attitude spells financial doom.
However, the trick lies in not letting yourself make an impulsive purchase. If you know there's a discount going on in a certain mall or store, don't even venture close to it, not even because your friend wants to buy something.
>>u00a0Keep a buffer to pay the EMIs: First of all, never agree to pay EMIs that leave you with no breathing space. For example, if your salary is Rs 50,000 pm, don't commit to a Rs >>0,000 EMI. Opt for Rs 30,000 per month as this will leave you some money for your necessary expenses and to make some savings for emergencies.
If possible, always keep at least two EMIs total in your account. Predicting financial needs in the present economic situation is anyone's guess.
>>u00a0Don't spend with your debit/credit card: Spending virtual money can land you in a dangerous hole. Keeping track of your expenses becomes difficult when you spend with debit/credit cards and your balance sheet will suffer severely. Make sure whatever purchases you make are either with cash or cheques.
>>u00a0Cut down on cabs: Comfort comes first. Agreed. But if it is at the cost of missing an EMI instalment, then you need to rethink. Stop travelling by cab on a daily basis. At the end of the month you'll realise how much you've actually ended up saving. However if you just resent the idea of taking public transport, find a colleague who stays close by or a neighbour whose office is located in your area and pool in. This way both of you end up saving without sacrificing on luxury.
>>u00a0Make early repayments: If you happen to receive unexpected monies, say from some investments you made, give the money to your home loan bank. Prepaying a loan will lessen the burden from your shoulders and you'll become loan-free sooner than you expected.
>>u00a0Put your vacation on hold: With all your saving techniques in practise, if you end up going on a vacation because you have a healthy bank account, then you might as well have had not made the effort. Travel ads will lure you to no end, but just tilt your chin up in the air and pretend to not have noticed any.
Your home in Mumbai is going to be your big reward eventually!
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