Riju and Madhurima Dasgupta started living in a gated community in New Town, Kolkata with their 5-year-old daughter for the last 3 months. Riju is a mid-level manager in a renowned 5-star hotel in Kolkata while Madhurima is a History teacher in a reputed school in Kolkata.
Rijuâ€™s hotel was hit hard by poor room occupancy and footfall in restaurants and the absence of parties to a large extent. After the lockdown was lifted, although the situation started improving, it is yet to recover sufficiently. A nagging fear of retrenchment is at the back of the mind of all employees, and Riju is no exception. He is really worried as they had taken a home loan while buying their apartment.
Madhurima is somewhat better off, yet the pressure of taking online classes without physical interaction affects her nerves sometimes. She is quite concerned about their financial position and decided to make a few changes in their lifestyle.
Every new homeowner can adopt such lifestyle changes to get over the current financial stress which, we hope, will pass away soon.
Keep Home Furnishing at Bay for Now
While Madhurima wanted to get new furniture, fittings, curtains, drapes, and lights at one go in her new apartment, she thought it wiser not to. After some consideration, she decided to make a plan to buy these things gradually over months without dipping as little as possible into their savings. They actually rented some furniture, for now, saving a considerable amount. In fact, their earlier plan to take a home furnishing loan was discarded.
It is tempting to remodel the home at once but that can add to financial worries. It is better to start saving for a dedicated fund with this purpose in mind.
Avoid Taking any New Loan Now
Interest rates are at record lows right now. This has made auto loans, home renovation loans, etc., quite affordable. It looks like this could be a once-in-a-lifetime opportunity to own a vehicle or to get all those lovely furnishings for your new home. It is surely tempting to take a car loan to own a new car and take a home furnishing loan. This would, however, have an adverse bearing on your monthly finances. Overburdening yourself with new loans at this point would amount to poor judgement, as the economic conditions also pose a risk on job security and business safety. It is advisable to sit tight and maintain a wait-and-watch mode, right now.
It is certainly better to focus on paying off your home loan right now. New loans to buy that new car can wait till a significant portion of your home loan principal is paid off.
Control Social and Entertainment Expenses
Home-ownership means you have an additional responsibility on yourself. You must avoid some social and entertainment expenses to save some money for the rainy days.
If you cut down on some movies (you can watch them on OTT platforms) and restaurant outings, visits to shopping malls, and reduce the number of parties you must throw at home, you can save a substantial amount of money to take care of other home expenses.
Be Careful of Buying Too Many Insurance Products
We are living in somewhat uncertain times. This creates sufficient mental stress and fear of the future among many of us. There is a temptation to buy additional insurance products to stave off any financial difficulty in the future.
However, buying additional insurance products means that the liability for paying the premium will go up and will significantly dent your current financial position. Even for buying home insurance or home loan insurance policies, you must exercise caution.
Stash away Some Money for Small Repair and Maintenance
As we start living in an apartment, wear and tear starts and these must be attended to on a regular basis.Â There is a need for a plumber to clean up a choked pipe or changing a faucet, or an electrician to fix the electrical wires. Then there is the need for servicing the AC, kitchen chimney, or washing machine.
All these must be taken care of on an urgent basis and there are some expenses. It is better to stash away some money for such minor repair and maintenance.
Although the harsh economic situation of 2020 is largely over, we are not completely out of the woods yet. Homeowners must be extra careful by adjusting to the new normal in 2021 after careful consideration.