Category: Finance and money

Let your money work for you: Bank Accounts and Fixed Deposits explained

A common practice for us is to put our savings; salary or money gifted to us either in a bank savings account or away in one corner of our cupboards- to be used for some exclusive purchase or emergency. What we tend to forget is that the sooner you start investing, the more time your money will have to grow. Remember compound interest that we did back in school? Well, it applies in real life too! Rs.100 that you invest today say, earns Rs.10 by next April 2015, and by April 2016 you not only get another Rs.10 on the original Rs.100, but also get another Re1 on the Rs.10 which was the profit for the first year. Simply put, the law of compounding returns says money invested creates more money. This is what I mean when I say let your money work for you! Let me start with the basics of bank accounts. Current account and a Savings Account are the two basic accounts opened with a Bank. A Current Account is generally used for easy liquidity with no limits on number of transactions from such an account and provides an overdraft facility. This account is used mainly for business purposes. The catch being that the bank pays no interest on the balance held in this current account. A savings account meanwhile, is the most popular account in...

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Life Contingencies – Are you prepared? [Part II]

This is in continuation to my first article on life contingencies. To read, click here Now that we are aware of the contingencies, let’s talk about our preparation. What should be the quantum of life insurance cover one should take? The sum assured or risk cover has to be adequate, whether taken from the same insurance company or multiple. This means, if my husband dies tomorrow, my kids and I should get an amount that will compensate our living expenses for the future that we have to face without him. If it means paying a higher premium, then so...

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Life Contingencies – Are you prepared? [Part I]

This year it was my husband’s 40th birthday. We have 2 beautiful kids- a 12 year old son and a 10 year old daughter, studying in a premium school. We currently live in our own house and fortunately have no liabilities. Our dream is to ensure that our kids are well schooled and we have enough to support their education goals when the need arises. I am a working woman and I contribute about 15% to the total household income. What if something goes wrong today! Can I handle it by myself? Will I be able to support the education goals for our children by myself? Will I be able to maintain my present lifestyle going forward? Is there a way I can fill this gap and not have sleepless nights worrying about it? Some thoughts I never want to ponder on! But do I have answers for them, if god forbid, something does go wrong? I realised that though my life was on track it needed a safety net – some precautions against the uncertainties of life. My husband needed to be insured and so did me….for us! As a financial planner I did find out the answers for myself. I like to be prepared for the worst. I would like to share my thoughts with you. Death of a loved one can cause 2 types of distress- emotional and...

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Hey Momma, Know Your Money!

The other day, at my school reunion, we got talking on managing money. A friend told me that she did not feel the need to know about money management as her husband took care of everything including her salary income!! At that moment we all laughed it off but I was quite surprised! Why do we assume that Women cannot make financial decisions; Women do not understand finance?!! It is all a myth which unfortunately too many of us Women believe! As a result, we have very little say in our own finances beyond the day to day running of households. If you are contributing to the family income, it is your money, your blood and sweat, 10-18 hours of work everyday translating to an income – translating to some savings. You should show some concern on how the family finances are being run! Even if you are not an earning member, isn’t it in your interest to know how your family is faring money wise and how you could improve on it!…or do you believe that your responsibility is only to cut down on expenses? The seeming complexity of the finance world filled with jargons, acronyms and ratios has dissuaded most women from making an attempt to enter it, when all that is needed is confidence and some basic knowledge. Believe it or not -It is No rocket science...

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Know Your Money

The other day, at my school reunion, we got talking on managing our money. A friend told me that she did not feel the need to know about money management as her husband took care of everything including her salary income!! At that moment we all laughed it off but I was quite surprised! Why do we assume that Women cannot make financial decisions; Women do not understand finance?!! It is all a myth which unfortunately too many of us Women believe! As a result, we have very little say in our own finances beyond the day to day running of households. If you are contributing to the family income, it is your money, your blood and sweat, 10-18 hours of work everyday translating to an income – translating to some savings. You should show some concern on how the family finances are being run! Even if you are not an earning member, isn’t it in your interest to know how your family is faring money wise and how you could improve on it!…or do you believe that your responsibility is only to cut down on expenses? The seeming complexity of the finance world filled with jargons, acronyms and ratios has dissuaded most women from making an attempt to enter it, when all that is needed is confidence and some basic knowledge. Believe it or not -It is No...

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