RBI has been increasing the base for interest rates quite often in 2011. This measure is primarily aimed at containing inflation.
Inflation has already had a severe impact on the middle class. If one is paying a home loan under floating rates, their EMIs are bound to go up.
If the impact is severe on you and you are wondering what to do, here are some possible suggestions.
1) Have a look at your budgets and actual expenses , determine the areas where you can cut down your expenses ( nice to have expenses). If you have not been budgeting or recording your expenses , this is the right time to start doing now.
2) If you have had any decision to purchase some electronic gadget or a home appliance, pull of the purchase under the carpet for some time.
3) If you are using a credit card, put that in a locker for few months , so that your impulsive purchases can be avoided. Moreover, you tend to spend less when you pay through cash ( when compared to a card or cheque payment).
4) Pre-pay your loan as much as possible . Spare money ( except that kept aside for contingency) should be used to pre-pay your loans and don't even think of investing with an idea to make quick returns.
5) Finally, be prepared for another hike and make a provision for that too.