Spend, Save and Invest Smartly
The festive season is just round the corner. There are so many things to buy. New clothes…New Shoes…. and the latest Smartphone. The Smart phone is a problem. New models are being released by different Companies each week. So which one to buy?
Festive season is a time you spend not only your last month’s salary, but also the money you have saved in the last 6 months. Festive season is a time to squander your money. Worse…All those e-commerce Companies know your weakness. They offer discounts and deals which you cannot resist. So how to make sure you don’t overspend this festive season?
You must make a shopping list, way before the festive season. Stick to your shopping list no matter what. Buy only what you really need. Don’t be fooled by deals and discounts, offered specially to lure you this festive season.
Remember : If you buy things you don’t need, soon you will have to sell things you need.
Your neighbour has the latest Smartphone. The first thing you see when you meet him…his new Smartphone. More bad news…He has booked a new car. Something must be done about this.
You decide to buy the latest Smartphone, to keep alongside the two Smartphone’s you already have. The neighbours will be full of envy this festive season, seeing your new Smartphone.
Remember: You don’t live on this earth to compete with your neighbour. If you try to make your neighbour a beggar, you will become one yourself.
Dining out is very costly. You keep eating Gourmet Dishes in those cozy hotels. Everything is nice, except the bill. That’s a shocker. You literally eat your salary when the bill is presented to you. Then those parties… New Year Bash .. Diwali bash… Those are fine. Nowadays life is just one big party. You just forget the occasion. Fine dining and partying is not a bad thing. It only needs to be done in moderation. How do you know how much you are spending on the parties? Keep a copy of the bills and credit card statements, for a month or two and you will get an accurate picture of how much you are spending, on those parties.
You want to be seen. You must be praised. This is the feel good factor. How can you be noticed by your friends, neighbors and people around? You wear trendy clothes which cost a bomb. You use the finest perfumes. Shoes which have the sporty feel. Let’s take it to the next level. Smartphone’s which have features you don’t understand and definitely don’t use. This is the feel good factor. You buy things to impress others, so that you may be praised by them and feel good. Oh…What a nice phone you have. That shirt looks so nice on you. Those shoes were made for you. These comments sure make you Happy. But what about the cost of these nice comments and praises? All your hard earned money, both salary and savings are blown away, with this reckless craze to look good. You continue like this. Soon you will have no money left to spend on your basic needs. Worse… you will have no money to spend on yourself in an emergency.
You want the latest bike so that you can roar down the streets. This bike makes so much noise, that the whole neighborhood wakes up. So what if you took a loan to buy the bike? With the personal loan you not only bought the bike, but also a smart phone and a laptop.
The problem is not of borrowing money to live life king-size. The problem is of repaying the money. If you avail a personal loan for frivolous spending, then you need to remember that repaying this loan may not be easy, as it charges an interest of 14-17% a year. If you are unable to repay the personal loan and default on it, then your Cibil score is affected. You will not be able to avail any other loans especially a home loan, when you need it the most.
Remember : Never borrow more than you can repay. The EMI on your loans, should not exceed more than 40% of your income. You have learnt the reason for your salary getting over so soon. It is up to you to take steps to spend less and save more.