According to experts, the big problem when moving is balancing spending, so you should divide your financial resources clearly to meet your living needs.
My husband and I have a house with a street frontage in town, 80 km from Ho Chi Minh City, and are doing interior design business, with a very good income. During this difficult time, our monthly income is about 50 million VND. We owe the bank 2 billion VND, and pay about 15 million VND in interest each month. Now a bank wants to rent the house for 80 million VND per month. My husband and I think the price is good, so we are thinking about it.
If they don't rent, life is still comfortable, with only the pressure of paying the bank and buying a house for their children. If they rent, the couple will have to start a business elsewhere or look for a job, but the economy is difficult at the moment so there may be obstacles.
I plan to return to my hometown - Long Khanh city (Dong Nai) to continue my interior design business. But there is already a store in that area owned by my siblings, and I am afraid of offending my family. Long Khanh is also developing, so competition is high and the rent is also high. The plus point is that it is close to my grandparents and parents.
My husband and I are both 35 years old and want to return to Ho Chi Minh City but haven't worked in an office for a long time. My wife used to be a marketing manager for a beer company so she wants to get that position back. I used to work in the banking industry. We have two small children so I don't know how to conveniently take care of them. Not to mention, I see my friends struggling to raise children in the city. If my husband and I both work and earn 30 million, will we be able to live in Ho Chi Minh City without having to pay rent?
I look forward to receiving advice from experts and readers.
Nguyenthileha10
A business premises on Phan Dang Luu Street hangs a “For Rent” sign, March 2020. Photo: Quynh Tran
Consultant:
Based on your question, I see that you are prioritizing the desire to return to live in Ho Chi Minh City. In addition, you and your spouse are concerned about the possibility of finding a satisfactory job as well as the ability to cover family expenses within the income of 30 million VND per month.
Due to the lack of information about your abilities, work experience and relationship, I assume that your income is exactly 30 million VND per month as you expect. So the problem comes down to the cost of living for the whole family.
Based on our experience in consulting hundreds of clients who are young families (mainly in Hanoi and Ho Chi Minh City), the appropriate spending allocation for a family with an income of 20-50 million, with 2 small children, would be as follows: save and invest 20-30% of income; spend on enjoyment 10-15%; spend on essentials 55-70%.
Accordingly, your family can save and invest 9 million VND per month; spend about 3 million on enjoyment and 18 million on essential expenses. Specifically, you can consider the assumed spending level according to the following illustration table:
Spending group | Spending category | Amount spent per month (thousand VND) | Note |
Essential spending | Tuition for children | 8,000 | For 2 children |
money for shopping | 8,000 | For 4 people at a rate of 65,000 VND/person/day | |
Living expenses | 1,200 | Electricity, water, internet bills | |
Travel expenses | 800 | Parking, gas money | |
Beneficiary costs | Pocket money | 2,000 | For 2 couples |
Miscellaneous expenses other than essentials | 1,000 | Eating out, shopping | |
Saving and investing | 9,000 | Because you keep the money from renting a house in town to save, you use this 9 million to rent a house in Ho Chi Minh City * | |
(* 9 million VND can rent a 2-bedroom apartment in districts far from the center, about 12-15 km from District 1 or a small townhouse in a small alley)
With the above estimated figures, you can consider the needs and actual living standards of your family. Of course, the monthly bank loan payment of 15 million VND still has to be deducted from the rental income in town.
With the move back to Long Khanh, this option is facing three disadvantages. First, the high cost of renting premises will affect income. Second, the business potential is still open because this is a new business area as well as high competition in the area. Third, direct competition with the business of siblings in the family. Therefore, you should consider the resonance of all three disadvantages above compared to the only advantage of being close to grandparents and parents to decide.
Finally, I would like to suggest another option that you can rent another premises in the same town as your current house, with a lower cost than the rent you pay to the bank, which is less than 80 million VND per month. Then, you can still keep your business, and also benefit from the difference between the rent of the house and the rent of the new premises. Due to the lack of complete information about your house, this option is just a suggestion for cases that can be considered, the feasibility depends entirely on the rental market in the town where you live.
Hope you soon find a suitable solution for your family!
Ta Thanh Tung
Personal Financial Planning Expert
FIDT Investment Consulting and Asset Management Company
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