Dreaming of buying a house? If you don't want your dream to turn into a nightmare, put it through a reality check first: Can you afford the EMI without hurting other financial goals? Have you saved enough for the downpayment? Will you be able to prepay the home loan?
Your answers will tell you whether you can shoulder this long-term financial commitment or are better off living in a rented house. Our lives are lined with many such milestones—starting a family, launching a business or even retiring from work. Some of these are critical goals and the target date cannot be shifted.
The decision to start a family cannot be postponed just because the finances are not in good shape. Other goals are more flexible and their timeline can be changed. If the individual hasn't saved enough, he can push the decision to retire early by a few years.
Similarly, plans to upgrade to a bigger car be put on the backburner if the EMI will replace the mutual fund SIP for child's education.
Our cover story this week looks at key milestones and the steps that prepare one for the financial impact of these decisions. Much depends whether the individual's finances can take the impact.
Advance planning and disciplined investing can help one reach these goals without difficulty.
There's a lot to rom Mumbai-based Ameet Kalyanpur, who has diligently built up a sizeable corpus which will let him retire at 45. Equally, you ca ..
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