Since the couple was in a sort of cash crunch it was necessary for us to make them responsible towards their finances. That is, make them understand the difference between their necessities and luxuries.
It is obvious from their cash inflows and outflows (both being equal) that the couple would need to tighten their purse strings. One would obviously not like to cut down on the standard of living either, so we did plan out their vacations for the year and budgets in a way that they would save a small amount. We also pruned their budgets for eating out and partying out on a monthly basis.
While one can cut on other expenses you cannot miss out on your monthly credit card payments. Ideally, we told them, they must keep a tab on their credit card usage. Using it prudently was the only solution. The amount so saved on credit card spends would go directly in creating the required liquidity corpus for the couple.
By saving about Rs 3,000 per month on their credit card expenses, they could conveniently build up the emergency funds over a couple of months.
Also see: Auto insurance: Frequently asked questions
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