Personal Finance Tips
With the festive season shopping rush, loan and EMI-based offers are everywhere—especially the growing trend of zero-cost EMIs. People are easily buying luxury items on credit and EMIs, blurring the line between needs and wants. Many end up spending beyond their capacity, only to spend years paying off debt.
Reports show that nearly 70% of iPhones in India are bought on EMI, while 93% of people earning less than ₹50,000 a month use credit cards just to cover daily expenses. For many, credit and EMI are no longer options but lifelines.
Living on Borrowed Money
Buying goods on EMI during festivals may seem easy, but high interest rates on EMIs and credit cards lead to stress and financial burden, making the future uncertain. It’s a system where you can bring home products with a small down payment, but the EMI burden quickly turns into a headache.
Even Buy Now Pay Later (BNPL) schemes, often seen as risk-free, are proving difficult—about 25% of users struggle with repayments. Earlier, EMIs were mostly for big-ticket items like houses and cars. Now, they’re being used for phones, clothes, and even vacations.
Warren Buffett’s Advice
Warren Buffett always emphasizes saving before spending. According to him, you can’t become wealthy by spending more than you earn. Debt is not just a financial burden but also a mental one that grows heavier with time. In India’s growing credit-driven culture, this burden is spreading faster than ever.
Buffett’s 4 Helpful Tips
- Save Before You Spend
Always set aside a portion of your income for savings first. Don’t wait until the month ends. Even small, regular savings grow into wealth over time. - Use Credit Cards Wisely
Credit cards are not extra money—they’re only a convenience. If you fail to pay the full bill on time, you’re already in trouble. In India, credit card interest can go as high as 40% annually. - Build the Habit of Investing
Invest in instruments where money grows with compound interest. Even a few thousand rupees invested monthly can grow faster than expected. But remember, with debt, the same compounding works against you. - Create an Emergency Fund
Always maintain an emergency fund. During crises, it prevents you from swiping your card or taking unnecessary EMIs.