Dream house or debt trap? That’s the real question. While banks make buying a house sound like the easiest feat of adulthood, the EMI math often tells another story. Chartered Accountant Abhishek Walia is shaking things up with his take on LinkedIn, warning that the so-called “safe rule” banks feed you isn’t built for your financial freedom—it’s built for their loan books. And his no-nonsense breakdown is grabbing attention for all the right reasons.
Walia points out the classic pitch: “As long as EMIs are under 50% of your salary, you’re safe.” Sounds comforting, right? Except it’s not. That number is designed to maximise lending, not to help you grow wealth. The healthier benchmark? Financial planners recommend keeping EMIs under 40% of income—and if you can swing it, 25–30% is even better.
Why? Because life doesn’t freeze once you’ve signed off on that car or house. You still need to save for retirement (EPF alone won’t save you), build an emergency fund, invest for kids’ education, and cover the lifestyle creep that always sneaks in.
CA decodes the math
Salary: Rs 80,000/month
Bank’s pitch: Rs 40,000 EMI (50% “safe”)
Reality: Rs 40,000 EMI + Rs 20,000 household expenses + Rs 10,000 lifestyle = just Rs 10,000 left for investing.
At that pace, the CA believes that you’re not building wealth—you’re just surviving month to month. Walia offers a sharper litmus test: if your EMIs stop you from saving at least 20–30% of your income, then you’re not buying an asset. You’re buying stress. Debt, he says, isn’t evil—it can open doors. But freedom only comes when it’s balanced. A house should mean security. A car should mean comfort. Not sleepless nights calculating how to make it to the next paycheck.
Walia points out the classic pitch: “As long as EMIs are under 50% of your salary, you’re safe.” Sounds comforting, right? Except it’s not. That number is designed to maximise lending, not to help you grow wealth. The healthier benchmark? Financial planners recommend keeping EMIs under 40% of income—and if you can swing it, 25–30% is even better.
Why? Because life doesn’t freeze once you’ve signed off on that car or house. You still need to save for retirement (EPF alone won’t save you), build an emergency fund, invest for kids’ education, and cover the lifestyle creep that always sneaks in.
CA decodes the math
Salary: Rs 80,000/month
Bank’s pitch: Rs 40,000 EMI (50% “safe”)
Reality: Rs 40,000 EMI + Rs 20,000 household expenses + Rs 10,000 lifestyle = just Rs 10,000 left for investing.
At that pace, the CA believes that you’re not building wealth—you’re just surviving month to month. Walia offers a sharper litmus test: if your EMIs stop you from saving at least 20–30% of your income, then you’re not buying an asset. You’re buying stress. Debt, he says, isn’t evil—it can open doors. But freedom only comes when it’s balanced. A house should mean security. A car should mean comfort. Not sleepless nights calculating how to make it to the next paycheck.
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