Aruna Keerthy, a self-proclaimed personal finance expert, offers a unique strategy to tackle debt repayment and savings simultaneously. Her approach challenges the conventional wisdom of EMI payments, which often leave individuals with little to no savings. Keerthy's three-step method provides a refreshing perspective on financial management.
The EMI Conundrum
Many people find themselves in a financial bind, struggling to make ends meet after paying off their monthly EMIs. Keerthy acknowledges this common issue and emphasizes that it's not a personal failing. Instead, she suggests a proactive approach to address this dilemma.
Step 1: Create Breathing Room
The first step involves creating some financial breathing room. Keerthy advises cutting back on non-essential expenses. This might include reducing discretionary spending on entertainment, dining out, or subscription services. By identifying and temporarily reducing these expenses, individuals can free up some funds.
Step 2: Pause New EMIs
Keerthy's second step is a bold one: stop taking on new EMIs while you're in the process of paying off existing debt. This strategy may seem counterintuitive, but it's a powerful way to accelerate debt repayment. By pausing new loans, individuals can focus their financial resources on clearing their current obligations.
Step 3: Redirect Surplus to Savings
The final step focuses on building healthy financial habits. Keerthy suggests that whenever an EMI or any expense ends, redirect the surplus funds into savings. Even a small amount, such as ₹2,000 or ₹3,000 per month, can make a significant difference over time. This approach ensures that individuals are consistently saving while making progress on their debt repayment journey.
Building Wealth with Salary Increases
Keerthy also provides insight into how salary hikes or bonuses can be utilized for financial growth. She recommends deciding in advance to allocate a portion of any salary increase towards debt repayment or savings, rather than immediately upgrading one's lifestyle. This disciplined approach ensures that financial progress is made consistently.
Personal Commentary
In my opinion, Keerthy's approach is a refreshing and practical way to manage debt and savings. It challenges the notion that EMIs are always the best financial strategy. By creating breathing room, pausing new loans, and redirecting surplus funds, individuals can take control of their financial destiny. This method empowers people to make informed choices and build a secure financial future.
Furthermore, Keerthy's emphasis on building healthy financial habits is a valuable lesson. It highlights the importance of discipline and consistency in personal finance. By adopting these habits, individuals can ensure that their money works for them and supports their long-term goals.
In conclusion, Aruna Keerthy's three-step strategy offers a compelling alternative to traditional debt management. It encourages a proactive and disciplined approach to personal finance, ultimately leading to financial freedom and security.
