How to get out of loan traps ?
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The best way to curtail wasteful expenses is to maintain a list of monthly expenses made every month. After the expiry of the month, you can go through the items and you will be surprised to find that many were wants and not needs. In other words you will find many which would have been avoided. Next month take care to avoid these expenditure. Do this exercise and you will be surprised to find that after 6 months of review you would realise that your monthly expenses have come down. This surplus you can invest every month in a Bank recurring deposit account. After the expiry of say 3 years, you will have a handsome amount at your disposal. Reinvest these and continue the cycle. Saving is a habit and cultivate it. Another principle is do not anticipate your income (say bonus etc) and spend in advance and repay it after getting that income. Take now pay later should be avoided at all costs.The list is not exhaustive but illustrative. more
Jun 26
Very good advice. In India today, we are bombarded by advertisements which encourage people to spend on frivolous things. When you have an urge to buy on impulse, adopt the 3 day rule. Postpone your purchase and review after 3 days whether you still think that you MUST go ahead with your expenditure. You will be surprised that in 90% cases better sense will prevail. Do not spend on vacations just because a credit card company says it is cool. By all means if you have the money in your account and you can spare this after paying all your essential, go ahead with the vacation. But the vacation is totally uncool if you are going to pay a heavy interest to your card issuer later. Use credit card as strictly a cash substitute which means you can pay for your purchases from the money that you have. Settle card bills in full. Better to avoid cards altogether or use only prepaid/debit cards. more
Jun 25
