There are needs and there are aspirations in today’s fast-paced life. We all sweat day and night to ensure our needs are met. At the same time, we set our sights on our aspirations such as an exotic trip or an iPhone purchase. Meeting all these may not be possible with your income alone. You will need to take a debt or two. That being said, excessive reliance on a debt-led need or goal-fulfillment strategy can do more harm than good. So, there has to be a balance between income and debt. It will ensure a financial discipline to meet all your needs and goals. Let’s discuss how to do it.

Discussing Strategies That Help Strike a Balance Between Income and Debt
Staying unaffected by peer pressure is the key to achieving a balance between income and debt. Most financial problems arise due to the peer culture. The strategies discussed below are prudent and aligned with your financial goals. Let’s read on without any further delay.
Save, Save and Save – The Mantra for a Perfect Balance Between Income and Debt
Times can be harsh all of a sudden, leaving you alone not only emotionally but also financially if you don’t save in your hay days. While conventional financial theory says one should save at least 10% of their income every month, there’s no harm in extending the savings limit. It will only prevent you from taking unnecessary loans and facing a financial mess later. A perfect balance between income and debt can be ensured by savings alone.
Otherwise, being influenced by your peers and the lavish lifestyle they live can drown you financially. Create a solid base with disciplined investment so that you can live and afford a luxurious life later.
Park Your Savings in a Mix of Financial Instruments
They say, don’t put all your eggs in one basket, spread them around. That holds for investments too. Putting all of your investments in one financial instrument, for example, in a savings bank account can make you lose out on attractive returns mutual funds can deliver. Have some 70-80% of your income in top-performing mutual funds and the rest in a bank account. Do it from your first salary itself. In case you haven’t done it yet, start doing it now before you fall into the debt trap.
Have a Balance Between Income and Debt by Paying Off High-Interest Loans with Low-interest Loans
High-interest debt such as the revolving credit card balance can be a harrowing experience, financially. The astonishing interest of 30-40% per annum will raise your credit card debt astronomically. Don’t take comfort from the minimum due amount that you can pay on time to avoid a late payment penalty.
If you have revolved the credit card debt by paying the due partially, do the course correction now! Take a personal loan at a lower interest rate of 12-20% per annum to pay off the credit card debt now. Maintain discipline to pay off the personal loan EMIs on time and boost your credit score.
Say YES to Health Insurance, Say NO to a Loan to Deal with a Medical Emergency
A medical emergency can all of a sudden cause a big hole in your pocket. Treatment costs increase by 10-15% annually. A health insurance policy covers diseases and several health conditions for a premium that remains largely affordable. You can get health insurance with coverage of INR 5-10 lakh for an annual premium of around INR 7,000-15,000 if you are in your 20s with no health conditions.
However, if you are found to have no health insurance when a medical emergency strikes, you will have no option but to take a medical loan. The EMI payments will follow for nearly 2-5 years based on the treatment cost. Why pay EMIs with a medical loan when you can avoid it with a health insurance policy? Think about it and take the right step.
Conclusion
It’s all about the financial independence you should look for. Striking a balance between income and debt using the strategies discussed above is key to achieving the same. No matter the temptation for impulsive spending, you will need to resist that for a bright future. For more updates, follow zarooribaathai.in.