The study says the root cause of every nine out of 10 Indians is stress, mainly financial stress. Money, the most important factor in all’s life, is the source of pleasure and also the cause of extreme pain. The famous Bollywood song replicates this as, “Na biwi na bacha, na baap bada na maiya, the whole thing is that ke bhaiya SABSE BADA RUPAIYA…” This means that money in life is everything in this world.
It is studied that a normal human being spends approximately more than 50% of his per month income to match his status quo and to maintain his status. The word “Compromise” doesn’t seem to be in their dictionary; every comfort can be bought easily even by a smaller pocket on monthly installments i.e. EMI’s. One does not notice that with these compiling obligations they are building a mountain of debts, creating unwanted nuisance in one’s own life, and giving birth to “STRESS” which ultimately becomes the main cause of concern for many.
It is not only the obligation that is the cause of your financial stress but there are many many other reasons that plunge you into financial in-equilibrium for instance, emergency medical expenses, the child’s higher education, losses incurred in businesses, investments wiped out in equity stocks crashed, no pay hikes, no incentives, imbalance EMI payments, Irregular EMI payments, no job security, job loss, bankruptcy, etc. These identified numerous reasons cause financial harassment & stress. Only by sowing a basic seed of management the stress impact can largely be minimized or if watered properly can extinguish the financial stress. Let us learn this mantra of management for a happy life balancing.
1. Identifying your stress cause – A solution can be derived only when you learn what & where the problem lies. People are usually surrounded by the various outcomes of the financial stress that they are befuddled between the outcome of financial knock-down and the root cause of the problem. At a point, both look parallel in distress, and identifying the root cause gets hazed. Therefore before finding a solution it is important that you find not only the problem but the cause of the problem. Say, for example, you have no money to deposit your children’s educational fees. In this case, having no money is a problem but why you do not have the money is the cause of your problem. Borrowing funds from X person or institute may temporarily solve your problem, but they are no permanent solution to the problem. This is a common misconception among the people. Therefore identifying the cause of your stress is more important if you want to be stress-free.
2. Plan your monthly budget – Plan well in advance for your monthly expenses. Prepare a monthly budget and spend according to the planned allocated funds for your home, personal and office expenses (which include essential items, medical expenses, traveling expenses, policy premiums & Loan EMI’s, etc.) and even make provisions for your savings in the budget. Plot your budgetary plan, analyze your per month expenses & by regularly monitoring your per month expenses will help you to strike a balance between your spending/expenditures and savings/income. Analyze the urgency of the expenses and strike out unwanted expenses that can be postponed or reduced. This will help to curb your unwanted expenses and reduce the expenses which are immaterial in nature.
3. Avoid over borrowings – Borrowings are becoming very popular and common among the people of current generations. Luxury and esteem needs are now among the basic necessities of the urban lifestyle. The realisation is no exception to this rule. The popular use of branded items for mobiles-phones, laptops, clothing, footwear, accessories – sunglasses, watches, posh cars and a posh apartment in a multi-story building, etc has become the current status symbol. And most importantly these luxuries are available at an affordable cost of EMI’s. Even the lifestyles and eating preferences of the people have changed. Prestigious marriage ceremonies and parties, touring for holiday vacations, hotelling, the journey from roti-sabzi to Italian lasagne & junk foods of pizzas, burgers, pasta, and Chinese momos, literally all causes of sense enjoyment requires spending money for which there are all sorts of borrowings available from the lender right from a housing loan to a personal loan or a car loan, a holiday vacation loan/cards, credit cards, consumer loans, etc. Knowingly or unknowingly you keep on compiling the debts, and to pay-off the old debt you borrow a new debt. A strong way to avoid over borrowings, financial burden, instability, and ultimately avoid the financial stress it is suggested that you borrow only a considerable amount (say 50-60% of your per month income) that you can easily repay.
4. Cutting the cost of your addictions – It usually starts with a single cigarette or a small glass of drink (alcohol) then another for your mental and tension relief, further making you habituated to match the prestige of the society you dwell in or work with/for, later just to realize you have already been addicted to it. Some people are habituated to cigarettes & drink. They cannot control it. Let’s see what happens if you cut down on your addiction and save. Astonishing figures:
Assuming you spend per month around Rs.1500 to Rs.1800 on smoking and Rs.2700 to Rs.3000 on alcohol consumption, in total you spend around Rs.3.6 lacs to Rs.4.32lacs on smoking and Rs.6.48 lacs to Rs.7.2 lacs on alcohol in 20 years, which are merely your expenses. On the contrary if you divert the cost into systematic investments for the said per month expenses over 20 years you are likely to receive a long term profits which accounts almost double of your investments i.e. Rs. 7.65 lacs to Rs. 9.19 lacs & Rs. 13.78 lacs to Rs. 15.31 lacs respectively.
One such addiction is the use of plastic money- credit cards or virtual credit cards. People are being addicted to shop on credit, which later increases their financial liabilities.
Therefore losing your health as well as money does no good to you rather than mounting financial stress. It is therefore important that you learn the art of reducing the expenses for healthy financial management.
5. Plan appropriately for your future business expansions and money earner diversification thoughts – An urge for earning an extra penny apart from your fixed monthly income gives birth to new business ideas. A thorough study is a must if you are looking for any such expansions and diversifications. Plan your cost before jumping into new ideas. Total funds required, infra required, manpower required, availability of resources and fund arrangements, etc. are few of the costs that need to be estimated along-with the visionary profits and loss. Starting a restaurant, a food corner, taking up a franchise business, starting a small scale business, organic farming cultivation, etc. are few such businesses that have emerged in the recent past. Taking into account the associated risks involved in the new start-up, diligently plan your finance and avoid taking an excessive risk to limit your financial losses.
6. Avoid panic selling of investments – A recession period, or the period of financial crises, inflation, the global impact on the country’s economy, impacts on the global markets, epidemics that worse hit the country like the plague, SARS, swine flu and the current pandemic of COVID-19 are few such reasons that have a direct impact on the global international as well as the Indian stock markets. The stocks react negatively and the prices of the shares fall bringing down the entire value of your investments. Also hit are the mutual fund investments and the SIPs. The interest rates on bank deposits (FDs & RDs) fall. This diminishes the net worth of your investments. Panic selling in stocks is seen to book the loss and to withdraw the investment before it further deteriorates. Therefore it is important whenever you invest, invest from a long term perspective. Looking for short term churns or trade can extinguish your invested funds. The high volatility and the unpredictable nature of the equity markets have constraints on intraday and short term trades. To avoid financial loss and therefore avoid financial stress.
7. Start saving for your future financial security – It is never too late to start for your saving. We have already seen how a simple cost cut in addictions can save you lacs and if invested fruitfully can earn you better returns. Savings need not always mean investing in huge amounts or going for high monthly premiums. Savings means assigning a certain portion of your income that can be easily invested after making provisions for your monthly expenses. Explore your savings options- equity, bonds, property, health plan, pension schemes, insurance policies, tax savings bonds, etc. The Golden rule for saving is “Never invest with the borrowed funds.”
8. Diversify your investments – Diversify your risk. “Don’t put all your eggs in one basket” i.e. invest in multiple financing options such as equities, bonds, shares, PMS (portfolio management services)mutual funds, SIPs, insurance policies, debentures, etc. or invest in fixed assets like property or land that will diversify your risk and reduce the chances of financial losses. Selecting a good investment option/option is an art of multiplying your income/investment. Seek help from the expert financial advisors if needed. Make your own study/ calculation of investment charts, growth expectancy, risk factors, return ratios, etc. and invest only that portion of your savings which will keep you stress-free. Also, don’t get lured by the sky-high returns promising Ponzi schemes. It will only wipe-out your entire life-time hard-earned money. Remember such schemes do not exist.
9. Reserve cash funds for your emergencies – Along with savings in multiple financial options & diversifying investments, it is important that you preserve sufficient cash reserves for your emergencies. Emergencies do not ring the bells and so do the uncertainties. Difficulties are faced during such periods of medical emergencies, unforeseen uncertainties such as job loss, health issues, or the current situation of lockdown (due to corona-virus), where you may need funds to look after you and your family and your home expenses. During such times of crises liquidating your investments may not be wise as it takes time, secondly, the investments may fetch you negative returns. Therefore it is understood that to live a stress-free life you need to have enough bank balance as a back-up tool to take care of your expenses during such periods of emergencies/uncertainties.
10. Consolidating your EMI’s – It is the most effective method for reducing your monthly EMI outgoes. Consolidating your multiple lender’s multiple loans to a single lender will help you in efficiently managing the loan repayments i.e. EMI. Consolidation is preferred, i) to reduce your current rate of interest & to enjoy low-interest rates, ii) to have the same dated auto debit for your EMI’s, iii) to handle all EMI’s through a single bank account. There are various ways of consolidating the EMI’s. i) The home loan or mortgage borrowers can opt for a top-up loan to close his high-interest rate unsecured loans (subject to his eligibility and property valuation) or ii) A home loan borrower can also apply for a low-cost mortgage loan to close his existing high-interest-rate personal loan, business loan, consumer loan or unsecured educational loans or iii) A loan borrower can apply for a home loan balance transfer or mortgage loan balance transfer or balance transfers of other loans with a top-up requirement.
Conclusion: The financial stress if not managed effectively can have multiple side effects on your life and on your health. It may cause mental health loss & health issues such as depression, insomnia & difficulty in sleeping, heart attack, etc., lowers your confidence and may form a reason for your broken relationships or divorce.
It is therefore important that you stay financially stress-free. Expert advisors at Loanfasttrack has facilitated towards the financial stress-free by providing their expertise on the borrowings for housing loan in Mumbai, mortgage loan in Mumbai, personal loan in Mumbai, business Loan, unsecured business loans, home loan transfer, top-up loans, car loans, educational loans, and loan transfers.
Loanfasttrack is a Mumbai based loan provider company since 2015 offering loan services in Mumbai. It also helps you:
√ To find the best bank for a home loan
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√ To get assured low-interest rates for the loan against property in Mumbai
Speak to our experts on 9321020476 or log on to https://www.loanfasttrack.com/ for additional details.