pay an interest of 6.8% on the principal, could end up paying about Rs 1,100 every month for ten years to clear the dues for that loan.
So, unless one is completely aware and ready to take risks like that, they must weigh the options carefully. Similar situations apply when we talk about post graduate degrees.
Loaning More than is Affordable
Itís but natural to give in to aspiration in life. Whether it is going for a swanky car or buying your dream house or anything at all, it requires a great deal of financial planning to turn these material dreams into reality.
The truth is that one has to very cautiously analyse oneís sources of income from salary and other means before applying for a loan. If you have not planned and saved for your house or are getting into a deal prematurely, according to your financial plan, then you tend to take a loan, more often than not. Home loans are easy to get in India in todayís date. The catch is the EMIs that you have to pay for a long duration every month to clear that loan. Now, you have to make sure that even if you need to switch to a lesser paying job or divert a lot of money that you earn to an anticipated cause, like your childís education or familyís health, etc., you understand that it requires a certain amount of financial backing to knock off those EMIs.
Today, a loan on the smallest home item is possible. However, whether or not it makes sense for you is the question you need to ask yourself.
Failure in Retirement Savings Scheme
In-depth financial planning involves saving for your retirement and keeping money in hand for contingency.
To avoid failure in your retirement savings, one must take care of the following steps:
* Save 10% of your income. If you are a regular salaried pension, it is a good idea to save about 12% of your income every month, which is what the EPF scheme requires you to do compulsorily and rightly.
* Increase investment as your income increases. That helps a lot. Most