ot a question about your money? What you should or should not do with it?

Our expert Uma Shashikant has the answers.

I am 28 years old and terrible with money. I earn Rs 24,000 every month but spend huge amounts servicing a car loan and a personal loan at 18% interest.

Once I take all my expenses into account, my savings are zilch.

How can I save?

- Jaideep

Even before you begin to save, your focus has to be on your income and your expenses. 

Let's talk of income.

If there is some way in which you can augment your earnings, go for it.  Take on additional assignments, seek another job that pays better, enhance your skill sets � whatever it takes.

Ensure that you are earning at your optimal potential. 

Now look at your debt.

Pay off the 18% loan first and make sure you do not take on additional debt. 

As for expenses, unless you deny yourself some luxuries, you may not be able to save. Don't lose heart, yet. It happens to most of us when we begin to earn. 

It may be worthwhile keeping accounts on where your money is being spent so you know what expenses need to be controlled.  

Begin with small amounts. Ask your bank to debit your account for an investment so that you don't have the money to spend. For instance, these small amounts can go into a recurring deposit. You will get used to living within a smaller budget in a while

• Save Now! Here's how

My monthly income is Rs 21,000.

I have an overdraft with an outstanding of Rs 30,000 and a credit card debt of Rs 50,000.

In a month I spend around Rs 6,000 on these payments.

I want to invest in shares and buy a home. Should I opt for a consolidation of these loans?

- Karmesh

It appears that you pay only the minimum due on the credit card. The outstanding amount could be accruing interest at anything between 24% to  32% per annum. 

The overdraft would easily be at least 2% higher than the interest you make on deposits. 

It makes sense to clear the debt that you have before you think of investing. 

If your investment return is lower than the interest you are paying, it makes much more sense to focus on clearing your debt. 

Clear the loans as soon as you can. Invest and create some buffer before you get into another loan for your home.

• Should you save or prepay your loan

I am 25 and drawing a monthly income of Rs 10,325.  I spend every rupee on repaying my loans and other monthly expenses.

My family insists that I get married next year. A decision I am against because of my lack of savings.

Right now I feel I should work on enchancing my career skills. What do you suggest?

 - Tushar

It would be tough to meet the demands of a family before you can augment your income.

You are right in your thinking that you should rather spend your money and time on educating yourself, rather than plunge into marriage. 

You have age on your side. Take the time to pursue a management degree from a reputed place. This will enable you to get a good placement at the end of your course. 

It is important to secure your earning capabilities before increasing your expenses. It is tough for you to save at your current level of income. 

That you are doing your best is itself a laudable matter. 

Illustration: Dominic Xavier

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