Wednesday, June 11, 2008

The depreciating standards of living

The rising cost of living is certainly beyond worry. A fellow colleague of mine commented over lunch today, that his fixed expenses takes up 70% of his take home pay. That got me startled and prompted me to do a fast calculation of my own. In order to appear healthier than what my finance is supposed to be, I have put in only the minimal amount of what must be spent in each category of expenses every month. To my dismay, it also clock in a 70% rate. The consolation to that is, I can see a 30% buffer or savings every month. Do note that I have entered only the minimal amount for each expense category. I then wondered what might probably happen in year 2010. My house installments will start to kick in, in another 1.5 years. That's not too far away. By then, the ratio has gone up to 95%.

As prudent as I could have been, I am left with only 5% savings. If I had to struggle in such a condition even without the full cascading effects kick in, i.e, the rise in food prices, building materials, financial cost (hope not!!), utilities, car maintenance, etc, one can't imagine how someone with lower income than myself could pull through. I now still have a six figure liability to my name. More probable than not, I have to let go of my condominium unit in the near future. The problem is can I find a buyer?