In debt? Get your spouse to chip in

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

Our expert Uma Shashikant has the answers.

I got married less than a year ago.

I run my own consultancy and earn around Rs 70,000 per month. My wife works in a bank and earns Rs 20,000 per month.

Now I am in debt to the tune of Rs 7,00,000. I made the mistake of taking a loan at a very high rate of interest.

My total monthly expenditure is around Rs 40,000, including the salaries to staff.

My wife refuses to help although she has a fair amount saved. All my savings have been drained servicing my debt.

- Manmeet Khurana

Please get real about the business you are running. Is the business draining you financially? Would you better off taking a salaried job in a firm?

Speak openly to your trusted clients and get their support. Send your staff home and do the work yourself. This way you will save on salaries. Maybe you can shift location and work out of a small rented place. This way you save on rent.

Take a hard look at what you spend and what you earn, and look at ways to curb your spending. Sell your house, car and all that you can, and repay the loan, before the interest consumes you.

It is better to protect your honour, rather than allow your debt to mount. 

Your priority must be to cut the vicious cycle of debt, before it gets you.  If you start right now and work at it, within a year you will be able to pull yourself out of this mess.

It is unfortunate that your wife has chosen not to stand by you. It is possible that she is despairing as well and thinks that all savings could be lost. Life is but a balance sheet, where you have to build some assets, before you can draw on them. 

Your relationship is new and it takes time to build faith. She needs to understand that you have it in you to rebuild your business. Be patient, and continue to communicate, and demonstrate your resolve to set things right. 

It is important that you are able to build the trust that what you have as expertise in consulting is worthwhile, and you are only temporarily bogged down by debt. 

• How much are you worth?

I am in my late 20s earning a monthly take home of Rs 17,000.

Home loan monthly payments = Rs 7,200
Monthly insurance premium = Rs 3,000
Monthly expenses = Rs 7,000

I have two little children and also have to support my wife and father. I am finding it impossible to manage.

- Pankaj Rathod

Try to augment your income. Find out if you can get yourself a better job or do some part-time assignments.

Persuade your wife to support you. Your home needs additional income and the responsibility is on both of you.

You need to encourage and support her if you think there could be pressures from the society and community you live in - several segments are conservative when it comes to a working woman.  

She can start by finding out what interests her and where her skills lie. I know of several Marwari women, who run boutiques and give cookery classes. I have a friend who is a Ph.D and teaches finance. Others give tuitions, run a play school or a crèche, work part time as a receptionist or telephone operator, give computer classes at home. 

It is possible today to be able to balance home and work, as millions of women world over have demonstrated. The limits are in our mind.

Even while this happens, keep a closer and tighter control on your expenses and see if you can save at least Rs 500 per month. Small drops can become big over time.

• Watch your money grow

I moved to Mumbai and found the expense of living in a big city overwhelming. I have landed up with a debt of Rs 1,50,000 in a period of just one year.

My monthly household expenses amount to Rs 15,000 when my net take home is just Rs 17,000.

I am not in a position to clear the huge credit card debt I have amassed. In Aurangabad, I managed to save every month.

What must I do? I am 27, single and neither do I have to look after my parents.

- Niranjan Sharma

Look at the positive side. You don't have the responsibility right now of a spouse and children and family. So you can get your act together.

Seek a transfer to a smaller town and move, if that is possible. I have a friend in Goa who runs her home comfortably with Rs 5,000 per month. There could be many who may like to change places with you.

Credit card debt can be killing when spending is not matched to earning. 

Are your parents aware of your finances? Do they know what you earn? They love you and you may find that they are willing to help you manage within your income and get back on your feet again.

You can work out a serious cost cutting exercise if you involve them, rather than create a silent credit card bill. 

Illustration: Dominic Xavier

Got a question for Uma Shashikant? Please write to us.

Note: Questions may be edited for brevity. Due to the tremendous response, all queries will not be answered.

Disclaimer: While efforts have been made to ensure the accuracy of the information provided in the content, rediff.com or the author shall not be held responsible for any loss caused to any person whatsoever who accesses or uses or is supplied with the content (consisting of articles and information).