Financial Literacy – Housing

Everybody needs a home. It is one the basic needs of human being and that is why one wants to have it at the earliest. Home is a place where one can live the way he wants to live, rest, relax, enjoy his time with family and friends and grow with passage of time. Like it is said that a picture tells thousand words, similarly a home speaks about the character of the owner or the person lives there. When we buy or build a home, we hope, it will provide comfort, safety and security as such when a person starts working / earning, the first milestone he wants to achieve is to have one’s own house. A house not only gives mental peace to the individual, but it definitely provides a sense of confidence and achievement. That is why, it is said that there is no place like home, some other people who became more sentimental comment “Home is the place where heart is”. These kinds of thinking convey the importance of home in one’s life. Contrast to this there is another school of thought which says” Fools make homes and Wise live there”. So, one can always relate which thought he belongs to. Anyway, home is a human need and it is there from time immemorial.

It is also a fact that when a person starts working, he cannot think of owning a house immediately, so he compromises with a rental accommodation. Depending on his income/earning one will decide the type of house one should take on rent i.e. whether a house or a flat. Obviously, the accommodation, the space and the interiors would be according to the type of accommodation, but the most important factor to decide is the monthly rent that he has to pay. So, one will continue to live in a rental accommodation till he does not own a house, but the day he feels that he can go for a house he will immediately take the decisions of buying / building a house. He may also think whether to go for a house or a flat. Well that may not be very difficult decisions, because that will be decided by his financial position. Both house and flat have their own advantages and disadvantages. Let us try to understand each one of these:

Advantages -- of a House:

There are several advantages of owning a house than flat. First choice of every individual will always be a house, but because of certain constraints, one has to compromise with flat. Anyway, some of the significant advantages are:

                            1. An independent house provides greater degree of freedom.

2. Design the house as per your wish.

3. Future modification of exteriors are possible.

4. Gardening is possible if the interest and space is available

5. Pets can also be kept with adequate space

6. Privacy, if a concern can easily be maintained

7. Problem of unnecessary noise may be avoided 

8. Scope for future addition/modification is always a possibility

9. Parking is not a problem

Disadvantages -- of a House

1.      Cost of living may be higher

2.      Feeling of community living is not possible

3.      Security may be a concern

4.      Maintenance of the house may be difficult and costly

5.      Help from neighbours is not expected

Advantages – of a Flat

Likewise, a flat has its advantages and disadvantages. Depending on individual’s preference and of course, other factors/limitations one has to decide. Let us the advantages first:

1.      Security is definitely better. Being a community living people know

each other closely

2.      Problems like water, electricity etc. is lesser. Generally a  

Common power back is provided particularly in society flats.

3.      Common facilities like park, swimming pool, community centre

etc. are generally available. Children can play and remain within

the premises of the complex.

4.      Garden and landscaping is part of the complex, so good ambiance

is maintained.

5.      Plumber, Electricians etc. are available on call, so the flat owner

need not worry about day to day problems.

6.      Provision store is available within the complex, so easy access of

daily consumables are not a problem

7. Sufficient parking space is provided, so one need not worry about

parking the vehicle.

  Disadvantages -- of a Flat

1.      One has to pay a fixed charge for the Maintenance of the

Common facilities.

2.      Exteriors cannot be modified or if possible then only in a Limited

way.

3.   Hobbies like gardening, keeping a pet may not be possible.

4.   A very common problem is experience and that is seepage from

      adjoining walls/areas.

5.   Loud noise could be irritating at times particularly if you have

nocturnal neighbour.

6.   No possibility of any expansion or any major change. 

Thus Financial literacy in respect of housing, enables the individual to evaluate all the aspects of the residence that one intends to go for, before arriving at the final decision.