EMIs - Financial Help or Financial Burden?

in #hive-1679222 years ago

If you think your salary can accommodate multiple EMIs and you tend to use the concept of EMIs to meet your needs and wants, you might want to recalibrate.

It's definitely ok to use EMIs to meet some of your needs (and not wants, I am specifying this explicitly). But there's a certain percentage allocation that must be done towards EMI payment.

As per financial experts, 25% of your salary can be used for the repayment of your EMIs pertaining to your needs. Using EMIs to meet your wants is not correct.

All our wants must be met only when our account balance is twice the price of the product we wish to buy.

To exemplify, if I wish to buy an iPhone 13 which costs almost around 75000 INR, my account balance must be at least 1,50,000 INR. Then only shall I go ahead and make that purchase.

The concept of interest-free EMIs is extremely lucrative and is a big-time push for us to opt for them to meet not only our needs but our unnecessary wants as well. But that's not a good financial management technique. Luxury is good only when we can afford it.

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So just do some more calculations to manage your monthly salary. Make sure your EMIs don't exceed 25% of your salary. If there's an urgent need, use EMIs but try to close them ASAP.

Proper financial management is really important to live a burden-free life. Financial independence is not hard to achieve, we just need to act wise and make the right decisions for ourselves.

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