RSG: HIERARCHY OF SAVINGS

RSG: HIERARCHY OF SAVINGS: A system that first takes care of fundamental concerns and only then moves to higher levels, can ensure disciplined investing You’ll ...

HIERARCHY OF SAVINGS

A system that first takes care of fundamental concerns and only then moves to higher levels, can ensure disciplined investing

You’ll probably be familiar with Maslow’s Hierarchy of Needs, if you've studied psychology, or more likely, marketing as part of your business school curricula. This hierarchy was formulated by Abraham Maslow to classify and understand levels of needs that human beings have. Starting from the most basic level, these roughly correspond to physiological needs, safety, social needs and, at the top of the hierarchy, what he called, self-actualization. According to Maslow, needs at a higher level become important only when those at the lower level are met. Someone who does not have enough to eat or whose basic physical safety is not assured is unlikely to worry too much about the deeper meaning of his or her life.

It is interesting to see that this idea of hierarchy of needs can be useful in planning one’s savings and investments. There are types of investments that belong at a higher level of a ‘Hierarchy of Savings’ and shouldn't be attempted before the lower levels are taken care of.

Here’s what I think this ‘Hierarchy of Savings’ should be like.

Level 1: Basic contingency funds: This should be the money that you may need to handle a personal emergency. Should be available instantly, partly as physical cash and partly as funds that can be immediately withdrawn from a bank.

Level 2: Term Insurance: A realistic amount that should be calculated to allow your dependents to finance at least short- and medium-term life goals if you were to drop dead is struck with a debilitating injury or disease.

Level 3: Savings for Foreseeable Short-Term Goals: Money that is needed for expenses that are planned to be made within the next two to three years. Almost all of this should be in minimal risk deposit-type savings avenues.

Level 4: Savings for long-term foreseeable goals: Same as level 3, except the planned expenses are more than three to five years away. This level should be invested in equity and equity-backed investments like equity mutual funds.

One could think of many other levels beyond this and really, the details matter much less than the concept. Also, depending on one’s circumstances, any of the levels may have to be modified. However, this is not an asset allocation tool. The point of this exercise is to prevent yourself from going to higher level unless the lower one is fulfilled. It’s simply a way of reinforcing that there’s little point in trying to fine-tune how much you will earn in an equity investment if you haven’t put away cash for an immediate emergency or adequate term insurance cover.

GREEN FACTS - ECO FRIEDLLY FACTORIES

Sustainable construction practices and eco-friendly operations are becoming the standard in every industry to increases bottom line and protect the future of our planet.

Energy efficiency to cut

Regularly replace HVAC filters, check window seals and use caulking and weather stripping to insulate buildings. Make use of CFL fixtures and programmable thermostats to reduce energy waste.

Renewable energy and

Green energy from wind, solar, hydro, or biomass sources is a reliable and consistent source of clean on-site energy that can even contribute back to the grid. Build your own source of renewable green energy on the premises.

Reduce and reuse cycle

Less waste means less money spent on waste removal, lower costs on raw materials and higher levels of efficiency overall. Use inexpensive post-consumer recycled raw materials and redesign packaging to avoid wasteful materials.

Planned and pre-assembled building components reduce waste to 10%. Because the building parts are factory-made, measurements are precise. Large pieces fit together whereupon the unit is sealed tightly to conserve energy. The construction renders almost zero waste and air & noise pollution.

Conserve water

A water efficiency program is a smart way to conserve water in heating, cooling, treating and disposing of it. Appropriate technology can help to minimize discharges to sewers and waste-water.

Cut back on pollution

Staunch the flow of waste at its source, eliminate raw materials from the manufacturing process that aren't needed in the final product. Use in-process recycling to get the most out of the materials and recycle used equipment instead of sending it to simmer in a landfill.

CHEMICALS TO COMBAT HOSPITAL INFECTION (HAI)

The medical care industry in India has grown multifold and upgraded its facilities by providing a clean environment or even a five star hospital experience to its patients. But to what level have hospitals upgraded their cleaning programme is a subject to be revisited.

Disinfection of the patient environment is a key component of the infection prevention and control process in a hospital. One of the most critical interventions that can be performed to decrease the risk for cross-transmission and the development of hospital acquired infection (HAI) is routine cleaning and sanitizing of the medical care environment. This includes both medical equipment and environmental surfaces. In order to gain cleaning efficiencies, one needs to be strong enough to justify its labour resources and have the tools to forecast staffing, chemical and equipment needs. Medical care facilities:

• need to protect their patients, families and staff
• need both conventional and sustainable programmes and products to aid in reducing infection rates and cost within their facilities

Threat and Objectives:

• Gain cleaning efficiencies

• Mitigate HAI risk

• Reduce overall maintenance costs

The Indian cleaning market now consists of a wide range of products both domestic as well international, making selection of the right product a challenge. One needs to assess the level of cleaning, disinfecting, sanitation and sterilization required in the facility. There are a few simple steps to identify the right product.

Common Surface Disinfectants:

Synthetic phenols kill a wide range of organisms and are widely used in operating rooms. They are excellent products for destroying the tuberculosis organism and do not lose their effectiveness in a soiled environment. They are corrosive and should never be used around newborns.

Quats are the most widely used disinfectants in market today. Due to their versatility and cost effectiveness, they kill a wide range of microorganisms including Staph, Salmonella, and Pseudomonas.

Quats are less corrosive and are used in schools, institutions, supermarkets and hospital settings.

Hypochlorite/Bleach is corrosive and should be restricted in use. It should not be used in general building operations because of the potential of interacting with other chemicals, which can result in a toxic gas. Although it can be used as a disinfectant or sanitizer, it is not an effective cleaner. Never mix bleach with another chemical.

Hydrogen Peroxide is more user-friendly ingredient versus bleach and will perform similar tasks. Peroxide products demonstrate versatility in cleaning glass, hard surfaces, carpets and restrooms. These are the most sustainable of the disinfectant products.

Iodine is a powerful disinfectant that, when used in the form of iodophors, will kill a wider range of pathogens than quats and phenolics. As a primary use disinfectant it is not desirable due to its staining properties. Because of iodine’s acidic qualities, its use is restricted to specialized areas, such as surgical settings.

Alcohol provides an efficient means of killing pathogens. Typically, ethyl or isopropyl alcohol is used for smaller area surface disinfection. These products are usually packaged in sealed aerosols or smaller-use containers, since alcohol can pose a fire hazard.

Sanitizers are used to reduce, but not necessarily eliminate, microorganisms from the inanimate environment to levels considered safe as determined by public health codes or regulations. Sanitizers are normally used in food service, food preparation, food processing areas and hand care products. The entire range of these products is available now in the Indian market. It is important to understand these chemicals not only for their efficacy, use and application but also in terms of their environmental effect. These products are mostly used in closed small areas and thus, the level of VOC needs to be referred to as acknowledged by the EPA. High level of VOC also has an adverse effect, as it promotes multiplication of certain bacteria.

Hence, there is urgency for the medical care segment to create a standard of cleanliness which is the best line of defense against HAIs. The need for right products for cleaning, disinfection and sanitation has never been so grave before. The time is ripe for facilities to adopt cleaning practices in the best interest of patients, healthcare professionals, and society in general.

HOW TO CONTROL SPENDING AND START SAVING

The biggest challenge for young investors is to control spending. Here are eight ways you can transform from a spender to a saver

You may have landed yourself a good job, earn a fat salary and have a bright future. Yet, none of this is quite evident when you look at your savings. This is not a one-off case and you are not the only one to have not paid heed to saving for the future. Young people often find it difficult to save in the initial years of their careers. Studies reveal that discretionary spending can be as high as 18-20% of the income for young people. A 2011 study by Assocham revealed that almost 35% of the urban youth spend up to 5,000 a month on clothing alone. This is one of the reasons most young people have such low savings. “Gen Y usually focuses on their EMIs, but ignores their SIPs. They want to splurge on the latest smartphones and the newest cars but not save for their future.

Discipline and self-regulation are the cornerstones of a successful investment plan. We know it is difficult to salt away money when everyone around you is spending as if there is no tomorrow.

There is tremendous peer pressure and even the most level-headed youngsters can stumble. Our cover story this week looks at 8 secret mantras that can help transform a spendthrift into a saver.

MANTRA #1 SAVE BEFORE YOU SPEND Many people are not able to save enough because they don't have anything left after all their expenses. Their financial equation is: Income Expenses = Savings. Legendary investor Warren Buffett offers a simple solution. He says the equation should be changed to Income Savings = Expenses. Instead of saving what is left after expenses, you should spend what is left after you are done with your savings for the month.

We know controlling expenses is easier said than done. However hard you may try, there will be some expense that will gobble up the surplus and prevent you from saving. The solution lies in automating your savings. If you give an ECS mandate to your bank for an SIP, the money will automatically flow into your mutual fund even before you can withdraw it. Ideally, the savings should flow into an investment option that does not allow easy withdrawals. This is one of the reasons that make the Provident Fund such an effective tool for long-term savings. Every month, the employee's contribution is deducted from the salary and deposited into his PF account.

The money keeps growing till the person retires. He can access the corpus before retirement only in certain circumstances.

MANTRA #2 WAIT BEFORE YOU SPLURGE The urge to buy something you like can be overwhelming. Easy financing options and plastic money prevent an individual from distinguishing his wants from his needs. Whenever you want to buy something expensive but not essential, follow the 30-day rule. Just postpone the purchase by 30 days. During that period, think hard whether you really want the item. At the end of the month, if you still want to buy it, go ahead and purchase it. However, if the item was not really essential, you will get over the urge to buy and will probably junk the idea.

This simple rule works very effectively in case of gadgets, apparel, footwear and accessories. It's also not very difficult to follow because you don't actually deny yourself the item. You merely postpone the purchase by a month. As a fringe benefit, you also get to research the item over the next 30 days.

There is another guideline that can help you know the difference between wants and needs. The 30-minute rule says that if you are unlikely to use an item for at least 30 minutes a day on average, you should not buy it. The fancy coffee maker is really no use if you take it out once a month. Of course, this rule is only for gadgets and appliances and should not apply to other essential household items.

MANTRA #3 AVOID USING PLASTIC MONEY Credit and debit cards are essential because an increasing number of our financial transactions take place online.

However, plastic can be dangerous in the hands of a reckless spender. Studies show that people tend to overspend if they use a credit card for a purchase. If they have to make the payment in cash, they feel the pinch. Since the credit card user only signs on the slip, the full impact of the purchase is not felt.

To suppress the shopaholic inside you, leave your debit and credit cards behind when you go to the mall. Take cash instead. Experts recommend some extreme measures for serious shopping addicts. Some say you should just note down the card details and then cut the card into pieces so that you can't use it anymore. Others suggest you keep the card in a paper sleeve and stick pictures of your kids or spouse on it. You will be reminded of the other goals you may be jeopardising when you swipe the card for an unnecessary purchase. “Keep in mind that every craving sets you back when it comes to reaching your long-term goals". One bizarre idea is to literally freeze your card inside a block of ice. It won't damage the card, but the user will have to wait for the ice to melt before he can access it. However, we believe the average spender won't have to resort to such extreme measures.

Just keeping the card in a safe place instead of carrying it around in the wallet is good enough.

MANTRA #4 START SMALL TO SAVE BIG At the beginning of your career, your income may not be very high. In many cases, there is a very small investible surplus after the all the expenses. Still, this should not hold you back from saving. For a young investor, the low quantum of investment is more than made up by the long period available for the money to grow. The magic of compounding ensures that even a small sum grows into a gargantuan amount over the long term. The investment can be scaled up as the income grows in the coming years. However, it is difficult for the average investor to maintain the discipline required for this approach over a long period of time. Mutual fund investors start SIPs but don't enhance the amount every year. Ulip investors pay the same premium year after year without any top-ups. Investors in recurring deposits and fixed deposit don't even have the option to increase their investment in the same account.

MANTRA #5 DON'T BE PRESSURED TO SPEND Everybody's financial situation is different. Just because your colleague has bought a new car or booked a flat in a fancy location does not mean you should follow suit. 

When it comes to big-ticket items like cars and houses, do the math carefully before committing expenses. For instance, the total cost of ownership of a car is much higher than the price quoted by the dealer. You also have to include the cost of fuel, insurance, servicing, spares and repair. There are a few rules for buying a car. The price of the car should not be more than 60% of your annual household income. The EMI should not be more than 15% of your monthly income or 30% of your investible surplus after expenses. Besides, a new car should be used for at least 8 years for complete return on investment. Similarly, assess how much you really need the new smartphone before upgrading.

MANTRA #6 LEVY LUXURY TAX ON YOURSELF The intention of this article is not to make you deny yourself the very luxuries that you have worked for so hard to attain. Every now and then, you need to treat yourself and your family to some fun as well. 

If a dinner and movie with the family costs him 2,000, another 2,000 is put into his savings. There is another advantage of this rule. 

MANTRA #7 DON'T SPEND TO DE-STRESS For many people, spending can be therapeutic. It is a way to unwind after a stressful day and gives the person a sense of control. However, the aftermath of this de-stressing exercise can be even more stressful if it burns a big hole in your pocket. Worse still, if the bills you pile up remain unpaid, because it will definitely hurt your credit score and you might find yourself denied a bank loan if you happen to require one. “You must use your credit card wisely and with caution. If you use more than 30% of your total available credit card limit, it will affect your credit score adversely.

Do you also frequently head to the mall and pick up stuff to fight depression and anxiety? Get a grip on the situation and look for healthier (and less costly) alternatives to unwinding. When you feel overwhelmed by the urge to go on a shopping spree, go for a stroll in the park or do some light exercise.

This will act as a distraction and ease the urge to spend.

MANTRA #8 FIX A BUDGET AND STICK TO IT This should have been the first mantra, but has been deliberately brought up at the end because Gen Y is put off by the B word. The fact is that setting up a budget is the first step towards prudent financial planning, and it's not too difficult. You have to just set a limit on how much you are going to spend on your clothes, travel, movies and eating out in a month, and stick to your budget. Budgeting also helps you keep tabs on the itsy-bitsy expenses, such as casual shopping for clothes, eating out, gifting, and entertainment. Most of the time, these smaller items go unnoticed even though they take up a large portion of the total monthly expenditure.

In the good old days, financial planners advocated the `envelope' method, where the outlay for each head was put in separate envelopes. Now you can sign up with a money management portal.

These websites aggregate all your finances, from savings bank accounts and credit cards to loan payments and mutual fund SIPs. They help you keep track of your money , alerting you when a payment is due or when you have overspent under a certain head.

20 THINGS TO START DOING IN YOUR RELATIONSHIPS

Family isn't always blood.  They’re the people in your life who appreciate having you in theirs – the ones who encourage you to improve in healthy and exciting ways, and who not only embrace who you are now, but also embrace and embody who you want to be.  These people – your real family – are the ones who truly matter.

Here are twenty tips to help you find and foster these special relationships.

1.  FREE YOURSELF FROM NEGATIVE PEOPLE.

Spend time with nice people who are smart, driven and like minded.  Relationships should help you, not hurt you.  Surround yourself with people who reflect the person you want to be.  Choose friends who you are proud to know, people you admire, who love and respect you – people who make your day a little brighter simply by being in it.  Life is too short to spend time with people who suck the happiness out of you.  When you free yourself from negative people, you free yourself to be YOU – and being YOU is the only way to truly live.

2.  LET GO OF THOSE WHO ARE ALREADY GONE.

The sad truth is that there are some people who will only be there for you as long as you have something they need.  When you no longer serve a purpose to them, they will leave.  The good news is, if you tough it out, you’ll eventually weed these people out of your life and be left with some great people you can count on.  We rarely lose friends and lovers, we just gradually figure out who our real ones are.  So when people walk away from you, let them go.   Your destiny is never tied to anyone who leaves you.  It doesn't mean they are bad people; it just means that their part in your story is over.

3.  GIVE PEOPLE YOU DON’T KNOW A FAIR CHANCE.

When you look at a person, any person, remember that everyone has a story.  Everyone has gone through something that has changed them, and forced them to grow.  Every passing face on the street represents a story every bit as compelling and complicated as yours.  We meet no ordinary people in our lives.  If you give them a chance, everyone has something amazing to offer.  So appreciate the possibility of new relationships as you naturally let go of old ones that no longer work.  Trust your judgment.  Embrace new relationships, knowing that you are entering into unfamiliar territory.  Be ready to learn, be ready for a challenge, and be ready to meet someone that might just change your life forever.

4.  SHOW EVERYONE KINDNESS AND RESPECT.

Treat everyone with kindness and respect, even those who are rude to you – not because they are nice, but because you are.  There are no boundaries or classes that define a group of people that deserve to be respected.  Treat everyone with the same level of respect you would give to your grandfather and the same level of patience you would have with your baby brother.  People will notice your kindness.

5.  ACCEPT PEOPLE JUST THE WAY THEY ARE.

In most cases it’s impossible to change them anyway, and it’s rude to try.  So save yourself from needless stress.  Instead of trying to change others, give them your support and lead by example.

6.  ENCOURAGE OTHERS AND CHEER FOR THEM.

Having an appreciation for how amazing the people around you are leads to good places – productive, fulfilling, peaceful places.  So be happy for those who are making progress.  Cheer for their victories.  Be thankful for their blessings, openly.  What goes around comes around, and sooner or later the people you’re cheering for will start cheering for you.

7.  BE YOUR IMPERFECTLY PERFECT SELF.

In this crazy world that’s trying to make you like everyone else, find the courage to keep being your awesome self.  And when they laugh at you for being different, laugh back at them for being the same.  Spend more time with those who make you smile and less time with those who you feel pressured to impress.  Be your imperfectly perfect self around them.  We are not perfect for everyone, we are only perfect for those select few people that really take the time to get to know us and love us for who we really are.  And to those select few, being our imperfectly perfect self is what they love about us.

8.  FORGIVE PEOPLE AND MOVE FORWARD.

Don’t live your life with hate in your heart. You will end up hurting yourself more than the people you hate.  Forgiveness is not saying, “What you did to me is okay.”  It is saying, “I’m not going to let what you did to me ruin my happiness forever.”  Forgiveness is the remedy.  It doesn't mean you’re erasing the past, or forgetting what happened.  It means you’re letting go of the resentment and pain, and instead choosing to learn from the incident and move on with your life.  Remember, the less time you spend hating the people who hurt you, the more time you’ll have to love the people who love you.

9.  DO LITTLE THINGS EVERY DAY FOR OTHERS.

Sometimes those little things occupy the biggest part of their hearts.  You can’t be everything to everyone, but you can be everything to a few people.  Decide who these people are in your life and treat them like royalty.

10. PAY ATTENTION TO WHO YOUR REAL FRIENDS ARE.

As we grow up, we realize it becomes less important to have more friends and more important to have real ones.  Remember, life is kind of like a party.  You invite a lot of people, some leave early; some stay all night, some laugh with you, some laugh at you, and some show up really late.  But in the end, after the fun, there are a few who stay to help you clean up the mess.  And most of the time, they aren't even the ones who made the mess.  These people are your real friends in life.  They are the ones who matter most.

11. ALWAYS BE LOYAL. 

True love and real friendship aren't about being inseparable. These relationships are about two people being true to each other even when they are separated.  When it comes to relationships, remaining faithful is never an option, but a priority.  Loyalty is everything.

12. STAY IN BETTER TOUCH WITH PEOPLE WHO MATTER TO YOU.

In human relationships distance is not measured in miles, but in affection.  Two people can be right next to each other, yet miles apart.  So don’t ignore someone you care about, because lack of concern hurts more than angry words.  Stay in touch with those who matter to you.  Not because it’s convenient, but because they’re worth the extra effort.  Remember, you don’t need a certain number of friends, just a number of friends you can be certain of.  Paying attention to these people is a priority.

13. KEEP YOUR PROMISES AND TELL THE TRUTH.

If you say you’re going to do something, DO IT!  If you say you’re going to be somewhere, BE THERE!  If you say you feel something, MEAN IT!  If you can’t, won’t, and don’t, then DON’T LIE.  It’s always better to tell people the truth up front.  Don’t play games with people’s heads and hearts.  Don’t tell half-truths and expect people to trust you when the full truth comes out; half-truths are no better than lies.  Remember, love and friendships don’t hurt.  Lying, cheating and screwing with people’s feelings and emotions hurts.  Never mess with someone’s feelings just because you’re unsure of yours.  Always be open and honest.

14. GIVE WHAT YOU WANT TO RECEIVE.

Don’t expect what you are not willing to give.  Start practicing the golden rule.  If you want love, give love.  If you want friends, be friendly.  If you want money, provide value.  It works.  It really is this simple.

15. SAY WHAT YOU MEAN AND MEAN WHAT YOU SAY.

Give the people in your life the information they need, rather than expecting them to know the unknowable.  Information is the grease that keeps the engine of communication functioning.  Start communicating clearly.  Don’t try to read other people’s minds, and don’t make other people try to read yours.  Most problems, big and small, within a family, friendship, or business relationships, start with bad communication.

16. ALLOW OTHERS TO MAKE THEIR OWN DECISIONS.

Do not judge others by your own past.  They are living a different life than you are.  What might be good for one person may not be good for another.  What might be bad for one person might change another person’s life for the better.  Allow people to make their own mistakes and their own decisions.

17. TALK A LITTLE LESS, AND LISTEN MORE.

Less advice is often the best advice.  People don’t need lots of advice; they need a listening ear and some positive reinforcement.  What they want to know is often already somewhere inside of them.  They just need time to think, be and breathe, and continue to explore the undirected journeys that will eventually help them find their direction.

18. LEAVE PETTY ARGUMENTS ALONE.

Someone else doesn't have to be wrong for you to be right.  There are many roads to what’s right.  And most of the time it just doesn't matter that much.

19. IGNORE UNCONSTRUCTIVE, HURTFUL COMMENTARY.

No one has the right to judge you.  They might have heard your stories, but they didn't feel what you were going through.  No matter what you do, there will always be someone who thinks differently.  So concentrate on doing what you know in your heart is right.  What most people think and say about you isn't all that important.  What is important is how you feel about yourself.

20. PAY ATTENTION TO YOUR RELATIONSHIP WITH YOURSELF.

One of the most painful things in life is losing yourself in the process of loving others too much, and forgetting that you are special too.  When was the last time someone told you that they loved you just the way you are, and that what you think and how you feel matters?  When was the last time someone told you that you did a good job, or took you someplace, simply because they know you feel happy when you’re there?  When was the last time that ‘someone’ was YOU?

MISTAKES TO AVOID WHILE BUYING A HOUSE

First-time home-buyers do not make property investments in a hurry. Take your time, study the market carefully and then make an informed choice.

No feeling in the world compares with moving out of your parents’ house or rented accommodation any buying a home of your own. And while the real estate market is currently very much in favor of buyers – buying a home as soon as you can afford to can sometimes be a mistake.

Some of the mistakes many first-time home-buyers commit can have serious repercussions on the value that they are finally able to obtain from their property purchase. Here are some of these mistakes:

Not checking out all the options

Due to limited knowledge of the local real estate market or dependence on a broker with a limited portfolio, we choose a home merely because it fits our budget. There is a sense of helplessness involved, we wish we had more options, but there do not appear to be any. This is a patent mistake. In any large city, new projects are being launched regularly and fresh options on the resale market become available almost every day. Any of these projects or units could represent a better deal.

Often, we succumb to pressure of the real estate broker and accept that even this particular unit will be gone within a couple of days. If one is using real estate brokers at all, it makes sense to engage more than one of them as the spread of options increase dramatically.

Inflexible focus on ready-to-move-in

In any growing real estate market, under-construction projects are cheaper than ready-to-move-in properties. In many cases, the locations and specifications of these projects are superior to anything that is currently available.

If one has been living in rented accommodation for a considerable length of time, opting for an under-construction flat and waiting for a year longer can make a huge difference in capital expenditure as well as overall comfort and lifestyle. You could have the benefit of a larger home and the advantages of better security, a clubhouse and a swimming pool for the same price that a normal ready-to-possess home would cost you today.

Failing to get home loan pre-qualification

Few people buy a house these days without bargaining with the developer, nor should they. This is a privilege that every aspiring home owner has, and one should make use of it.

However, attempting to negotiate with developers without being able to demonstrate actual purchasing power is a mistake. There are two essentials for success at the negotiation table – a down-payment and pre-qualification for a home loan. These two factors combine to give the developer sufficient reason to take the buyer seriously, and offer a better deal. Without them, he or she could be just another ‘window shopper’.

If your job is contractual in nature, make sure you take into account your other assets in case you are not able to pay your equated monthly installments on time. A lender generally takes into account such risks, the number of years you've been with a company etc. before finalizing a loan.

Not factoring in your family’s growth

A single bedroom flat or even studio apartment will undoubtedly meet the requirements of a bachelor or a newly married couple.

However, there is a ‘growth curve’ that needs to be factored in – most bachelors eventually seek to marry, and most married coupled will have children.

Also, elderly family members who are still able and content to manage on their own today may not be able to do so in a few years’ time.

In other words, it does not pay to think too small while buying a flat. It makes sense to budget for both finances as well as future needs while buying a home.