The present generation is often termed as the ‘EMI Generation’, and rightly so, because they believe in aiming high and dreaming big, but want to pay the price for it only as per their own comforts and convenience. A very common example of this is youngsters purchasing expensive gadgets on EMI schemes, and paying for them in installments each month.
Yes, it is true that one should not postpone their dreams to later, when there is an option available to work out things in the present and serve the purpose of immediate gratification. But is this policy always good? Not really!
Not many people know exactly how to go about managing their EMIs, and thus, end up getting in trouble from all sides. Sometimes, they might have to just return the item that they purchase on EMI, while other times they might create bad credit history, which could affect their future transactions.
Here are some of the mistakes that one must definitely try and avoid:
Dreaming A Little Too Big
In many Asian cultures, there is a common saying, that one must spread his or her legs only as per the size of the blanket they own. This basically means that you should only dream, as much as is possible in reality. So when you are purchasing things on EMI, you need to not only calculate the sum of the EMIs that you have to pay, but also additional costs that may be charged on your credit or debit card for choosing a scheme that doesn’t exactly suit your current financial situation. Moreover, the situation is worse for those who don’t have a steady source of income, and don’t even know where their salaries for the next few months are coming from.
Ignoring Clauses and Conditions
All EMIs come with certain conditions and clauses, which many people often ignore thinking that they must be the usual, general ones. However, the truth is that all EMI policies are very different from each other, and you have to go through the ordeal of reading the papers every time you buy a different gadget or item on EMI, even if it is from the same store or retailer. The conditions often change as per the product purchased. Look out for hidden costs, conditions mentioning about last dates for EMIs every month, the additional fine in case you don’t pay a particular installment on time, and any benefits available in case you pay a few installments together, in advance.
Ignoring Worst Case Scenario Situations
In today’s world, where everyone puts so much stress on leading a planned and secured life, it is important to be safe at every step. So you must be well prepared about worst-case scenarios, such as items getting lost or damaged. If an item you purchased on EMI gets severely damaged or lost, what do you do? Do you have the answer to this question?
Not many people are prepared for something like this, and hence, they must understand that cut-to-cut expenditure and income sort of living is not always the best. You must always have extra money saved up, before you take EMI schemes, even if you feel they are quite affordable. Extra money is never bad, but less money can be a huge problem! Always read through the guidelines properly, on the documents provided to you, when you purchase things on EMI.
Bruce Jordan is an enthusiast blogger and has been working on making Bill Pay easy and organized which will not only be faster than a speeding bullet but also secure.