- Access new
expenses under different heads, say experts. - Prioritise essential expenses while reducing discretionary spending.
- One can use
budgeting apps or spreadsheets to track expenses meticulously.
Meanwhile, Shankar Rhad, an IT employee, who shifted temporarily with his parents in Hyderabad from Mumbai during the lockdown when he was offered permanent
More companies asking people to come back to the office has meant that employees, especially those who started their career during the pandemic, have to move to a bigger city from their hometown. Like Bora, it has meant a sharp increase in living expenses.
For Bora, several areas witnessed substantial increases in expenses. The cost of food, accommodation (which includes a monthly payment of ₹15,000 rupees for his paying guest (PG) accomodation, along with additional electricity and maintenance bills, and travel expenses all surged significantly.
Plus, the upfront payment he had to make was substantial. Bora had to pay approximately ₹45,000, which includes ₹15,000 for the broker + ₹15,000 for rent + 15,000 for the security deposit).
Tax Implications: “Be aware of any tax differences that might affect your income in the new city. HRA rules may be different for metro cities that are not your hometown,” says Bhuvanaa Shreeram, co-founder and head of financial planning, House of Alpha, a financial planning firm.
“Reluctant to rely on my parents for financial support, I adopted a more frugal lifestyle, limiting my purchases to necessities and cutting down on certain indulgences, such as cigarettes. With a monthly income of only ₹35,000 rupees, sustaining myself in the expensive city of Mumbai proved to be a big challenge,” says Bora.
If your employer allows it, and time permits, consider taking up short term projects to earn an extra income.
Bora decided to move into a shared PG even if it meant compromising on privacy.
For Bora it meant using the Mumbai local and giving up the earlier habit of Uber rides.
Once you have settled in, you need to be careful with your finances. Here are some ways to do that.
“In no case your monthly emi should be more than 50% of your monthly earnings,” says Ananth Ladha, founder, Invest Aaj for Kal, a financial planning firm.
“If you stop or lower your contributions, it might be tough to achieve your long-term financial goals. Instead, work on making your budget work for both your daily expenses and saving for the future,” says Shreeram.
“However, if you are finding it difficult, for a short term, for a maximum of six to nine months, you can decrease your investments, but eventually in the long term you should increase it,” says Ladha.
It is important to remember that while going back to office may be a temporary setback financially, it can be a good time to pave the way for a financially secure future.
Remember that living in a larger city may provide more career opportunities, which can impact your financial future positively.