When you want to buy something and don’t have enough money, you resort to taking out a loan. Most people who take out a loan also choose to repay it in the form of EMIs or equated monthly instalments as it is easier for them. However, when those EMIs start to accumulate, pressure starts to build, and you may find yourself struggling on the financial front before you know it.
Your life becomes a ‘repayment schedule.’ If you have too many EMIs to repay, or if the cost of each EMI is high, it is time you reassess your finances to see where you can cut costs. Too many EMIs can eat into your savings, leaving you with almost nothing to provide for your children or your ageing parents.
So, there is a need to cut down on your EMIs. Now, there are many ways to avoid this. Follow some tips that you find below, and you will be able to repay your EMIs and save enough for a healthy lifestyle.
Don’t Buy Things You Can’t Afford
When it comes to your finances, one thing you should never do is overspend. For example, don’t spend on a fancy car when you feel that a simple one would do the job. In that way, you will be saving up for the more essential things in life and cut down on your EMIs since you don’t have to take out a loan.
However, if you feel that you may need such an expensive item, you can always use an EMI calculator to determine your EMI rate.
Save and Invest
It’s a good idea to save up and invest so that you will have enough for all your needs. Don’t just save blindly, though. Have a detailed plan in place when you save and make investments. Also, be sure to keep in mind your EMIs and work towards investing in repaying them.
If you plan to buy something for which you may need a loan, think about how you will repay the EMIs. Keep in mind the EMI rate when you invest in directing your investments towards repaying your loan.
Don’t Compare Your Lifestyle with that of Your Peers
Don’t buy things just because someone you know or someone close to you has them too. Only invest in something if you know you can afford it. Save money so that you can use it to repay your loan EMI. Try not to get into the culture of being too fancy.
Last Few Words
Don’t get into the habit of overspending. Also, don’t take out too many loans just so that you can have a better lifestyle. For the most part, try being as simple as possible. Repay your EMIs on time without defaulting. It’s easy to avail of loans but equally harder to repay them. So, be financially wise. If you must take out a loan, compare the different EMI rates, or use anEMI calculator to decide if you can afford it.