Children in parent’s ego EMI traps
When I say parents put kids in EMI traps, I mean the guys (like me) born in the 1950s, 60s whose children have started earning….and sadly turn to their parents for advise.
Well it happens like this…
A guy born in the late ’70s or early ’80s starts earning. He first goes and buys a nice motorbike – and for that he is happily paying an EMI. Age 24 to age 27 years…and the boy is happy.
Now the pressure starts…’You are earning so well, why do you not get married’…and at age 28 that pressure translates to marriage – arranged by elders, or arranged by youngsters themselves.
Now the EMI pressure starts…’Will you take your wife with all that silk saree…and jewellery…in your bike?’ you ought to be mad. To this the father in law offers ‘Yes yes…when we were young such good EMI for cars were not available..I had to wait for the company car. It came at my age of 42’ or some such shit.
This pressure then turns to blackmail when the girl gets pregnant. That is the last straw…he HAS to buy a car. So another EMI starts.
Then the collective ego of the whole society takes over. There is pressure to buy a house. Why should he buy a house? Because his father, father-in-law, ….and every uncle, aunt, ….will feel good. So suddenly the wife will also (brainwashed by ‘society’) will say ‘When our kid is born, the kid should come to our own house’.
So now one more EMI has got added on…the housing EMI. If he protests, the father will say ‘I will put Rs. 200,000 in the down payments…or some such shit’. So pile on a Rs. 75,00,000 house has been committed to. Down payment Rs. 7,50,000 – dad pays partly, Husband and Wife clean out all their accounts and the ‘house’ has been bought. EMI? Rs. 67,000. The guys income of Rs. 134,000 is now eaten up 50% by the housing emi, Rs. 12,700 car EMI, society charges….etc etc. the monthly surplus is about Rs. 1348…and the wife’s take home is about Rs. 65,000 – which can be used for …..
The wife having connived with her parents (for the kid), and her in-laws (for the house) is ecstatic that they now have a baby on the way, a new car (it is so hot how people travel by bus and train, OMG), a new house…
She goes to the gynaec – and he says…it is better that you take rest…..complications….
She comes back and asks her husband very sweetly ‘Can I leave my job?’. LOL.
The guy has been had. He cannot even think of taking sick leave. If he takes one day off, he cannot pay all his EMIs. LOL
Bala
Why the hell is the boy paying EMI for the bike or the car?
If the boy is earning 15 Lak per annum cant he wait 4 months and get the car out in cash?
If the guy started earning around 23 years, and now is 28, he just has 7.5 lak in savings? Where did the money he earned for 7 years go?
LuckyOye
Subra, what you showed is true for guys born in 70s to early 80s…for the late 80s onward crowd, situation is totally different…incomes are now no longer sustaining for buying own house. This so called “middle class indian dream” cannot be dreamt anymore. The family pressure to “get married” is easily thwarted these days… “live in partner” arrangements are going to become the norm. The girl will now be shit scared of getting pregnant, both socially (unmarried) as well as economically (OMG, if I cannot work, who’ll finance my lifestyle?).
There will be a severe shortage of children “born into” middle class and as such our “demographic dividend” is totally kaput in 10-15 years.
Amit
Excellent article 🙂 and depicts what many of my friends are into…
@ Bala – Actually the expenses is in tandem with what you earn. So even if the guy earns 15 lakhs … he might not be saving so much.
akshat
Is the guy’s income take home ? If it is post tax, he’ll have ~50k after society charges and car EMI. Take another ~25k for monthly expenses (maid/food/doctor/petrol) … he’ll still have 25k left.
aditya
@Subra
slaps after slaps to our generation :)/
@ luckyoye
Demographic dividend jokes are still prevalent?
Am surprised 🙂
Karthik
Story of my life Subra :).. Only thing is I didnt take loan for a car and luckily I bought a small car…
subra
arre guys do not get so mathematical. I know boys earning 8L married to girls earning 8L – and the life style committed is so damn tight that they CANNOT have a kid :-). Just a real life story for many of the kids I know. Sad thing is the EMI pressure is created by the stupid parents (my gen) who think that the inflation based strategy (buy a house it will always appreciate) will hold true even in a low growth economy like India will be from say 2017…..these big high priced houses may be very very diff to sell….
Jayant
Bike EMI followed by car EMI followed by Home EMI. Recipe for personal finance disaster.
Jagan
This SHIT’s amaizing! Subra, you know – you write – I read – I see the picture infront of me. 🙂
anush
typical. got a wife, 2 kids. emi on house and house not yet delivered for last 6 years(So can’t even sell if i want to L O L). Luckily wife is still on the job. But lifestyle expenses have doubled or even tripled in the cities over the last 5 years. So eventhough the combined take home pay seems to sound good to relatives, the surplus after expenses occurs only when you make the rupee stretch, plan and ‘budgetise’
Jitu
Scary……
And NO EMI’s for me, as of now 🙂
Amit
Very True Sir ! But the harsh truth is even when you know the truth , you just can’t get of out this quicksand trap . Everybody enjoys other miseries and then they say – See he is trapped . Bechara beta
krish
This is my story too with minor changes. Immediately after my marriage, bought a bike on loan and progressed to first loan home, bought a second loan flat (when we got huge pay hike), wife got pregnant and had to buy a car on EMI. But then wife’s job transfer to other town happened and had to quit. This all sequence happened in a matter of 3 years. After the kid was born, it became hand to mouth after all EMIs. We were hit with double blow of kid schooling expenses and rise in housing EMIs thanks to inflation and RBI. For 12 months, salary just matched EMIs and had to survive on credit cards. Personal loan 1 became 4 from parents & in-laws.
After exhausting all source of funds and on the brink of disaster, thought seriously on what went wrong and felt I could change my fate if I change my job at much higher level of salary & position.Fortunately I was successful in striking the right opportunity. I am debt free now. One of the best book title that I liked most is ‘debt is slavery’.
PrAvEeN
seeing the house rentals increase in bnglr I though going for a flat through home loan., but my fellow readers experiences are scaring me off
Sanjay
Interesting article.
If one has to point out biggest mistake in this person’s life what it would be? I think it has to be house purchase.
It is interesting that nobody has talked about decision of selling house when situation is hand-to-mouth. If you are under stress because of debt then get rid of it.
It is interesting to see that people maintain lavish lifestyle and blame on economy, RBI for not able to make savings.
Shankar
Your post is definitely bang on target. I could relate to it, but fortunately at a lesser degree of pain. Things could have unraveled similarly, but I am able to hold up (till now).
Sometimes a fancy payslip is a burden too!
V
Good post Subra. I see this happening to me in front of my eyes.
Chaitanya
Nice one Subra. It would be also helpful if you also write an article on how an “ideal happenning / plan without such EMI/debt trap” should be. So that people can atleast see by how much their lives differ from “ideal way” and try to follow it atleast to some extent.
Surya
Excellent article – very true and I’ve seen a lot of practical examples . You forgot to mention what happens if the husband’s job switches to another city at the end !!!