Here are a few money managment tips to consider before buying a house. These involve servicing the home loan and investments and are unrelated to the property purchase.
- Don’t be in a hurry! Buying property is often an emotional decision and even more frequently driven by a fear of missing out. These can result in mistakes. Take your time doing the research.
- Do not take a home loan for more than 70% of the property cost. You will need to pay the rest (30%). So while you do the research, accumulate the downpayment corpus.
- Ensure that the EMI is not more than 40% of your take-home – 30% would be ideal. The most desired mix is 30% expenses, 30% EMI and 30% for savings and investments.
- Do not rush to pre-close your home loan. You can pre-pay in parts little by little without affecting your long-term investments.
- If servicing the loan bothers you too much, do not pre-close it. Instead, open a fixed-income instrument, add what you can there, and call it the pre-closure corpus. Soon you will become comfortable with the idea of servicing debt as you have this corpus as a fall-back option.
- Ask, “What is the true cost of owning a house?” The answer for most people is inadequate retirement planning. It is okay to be emotional about buying a house, but why not also be emotional about financial independence in retirement?
- Most people have a “we will manage retirement planning later” attitude, but unfortunately, each year spent planning for a house purchase and servicing debt is a year lost forever and that “later” would never turn up.
- So emotional about retirement and ask/answer, “What is the shortfall in my retirement planning?”, “What am I going to do to correct this shortfall?”
- Track your progress to investing more for retirement each year.
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Now watch Let's Get Rich With Pattu தமிழில் (in Tamil)!About The Author
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Dr M. Pattabiraman (PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over 14 years of experience publishing news analysis, research and financial product development. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free, AUM-independent investment advice. Connect with him via Twitter(X) LinkedIn YouTube Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (Published by CNBC TV18) for DIY investors. 
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Most investor problems stem from a lack of poor decision-making. We made bad decisions and money mistakes when we started earning, and we spent years undoing them. Why should our children go through the same pain? What is this book about? As parents, what if we had to groom one ability in our children that matters not only for money management and investing but for every aspect of life? My answer: Sound decision-making. So, in this book, we meet Chinchu, who is about to turn 10. The story follows what he wants for his birthday and how his parents plan it, while also teaching him key ideas about decision-making and money management. What readers say! 
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