5 things to teach your kids about money

5 things to teach your kids about money

Children, these days, are much smarter and more informed than their parents at their age. They seem to be much in touch with what’s going around them. Then why leave out money management? The biggest gift that any parent can give their child is to teach them how to handle money and sadly enough this isn’t a part of the curriculum at most schools.

On this Father’s day, we bring you 5 simple actionable tips on how and what to teach your kids about money. 

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Security precautions for digital transactions

Measures you should adopt while carrying out digital transactions

Digital transactions can be conducted through different mediums such as credit cards, mobile wallets, bank NEFTs, etc. These are increasingly being preferred by consumers considering the convenience and ease of conducting transactions. Digital transactions have become all the more important with the current situation where everyone is working at home and looking at carrying out all transactions online. 

Digital transactions also tend to have some risks, including data breaches, security risks, thefts, and the likes. Therefore, consumers must ensure to take extra precautions while using digital mediums for monetary transactions.

Although online transactions offer cashless modes of transferring funds and making payments, an increasing number of cyber-attacks are proving to be a challenge in maintaining financial security. Today, cyber-attacks are commonplace and bank robberies are conducted digitally. 

To help users carry out digital transactions safely, we have listed here some of the precautions that you can take. (more…)

Tips to get out of the debt trap

7 smart tips to get out of the debt trap

There are multiple loans and lenders available today to meet one’s financial obligations. However, these loans have to be repaid duly as non-payment of dues has many repercussions like an unending cycle of debt or even jail time. This unending cycle of debt is known as a debt trap where essentially you borrow more to repay existing loans. It can eventually wipe out all your life savings or assets and it still may not be enough to settle them. It is therefore essential to make an effective plan to get out of a debt trap as soon as possible. 

We bring you some smart tips which you can use to make your way out of a debt trap.

Tips to get out of the debt trap

There are some basic measures that can be taken to avoid falling into a debt trap. Some of such measures are mentioned below.

1. Get an exact idea of the total amount due

The first and foremost step in repaying any dues is getting an exact idea of the amount to be paid. If you stuck with too many loans which you do not have a clue about, this should be your first step. Getting an idea of the total amount due will also help in better planning for the payment of such an amount and understand the gravity of the situation.

2. Prioritise and ensure timely payment of debt

Another important step is to prioritize the repayment of your dues. Ensure that the liabilities having a higher cost (interest cost) are repaid first. For example, credit card dues or personal loans charge interest at a higher rate. This will not only help in reducing the overall burden of debt but will also help in lowering the interest cost.

Another benefit of paying the dues on time is keeping your credit score healthy. A good credit score will ensure that you get timely credit to meet your financial needs. It is, therefore, advisable to periodically check the credit score to ensure that there are no errors and all the debt closed is duly reported to the credit rating agencies.

3. Consolidate loans

When there are multiple loans of different tenure and interest payments, tracking them and making timely payments can be difficult. Consolidation of loans will also help in reducing the interest cost from high-cost debt to low or medium interest debt. By opting for consolidation, you will get to consolidate all loans under a single bigger loan Hence, it is advisable to approach the lender to help you consolidate your loans. But bear in mind that, your existing loans will get closed, but you will still have a bigger EMI to pay depending upon the rate at which you get the new loan. 

You could also try balance transfer of loans from high interest to low-interest ones.

4. Reduce expenses and increase income avenues

If payment of dues is difficult to meet in the current income level, the only option available is to make room for such expenses in the monthly budget. This can be done by reducing the monthly expenses wherever possible at the same time finding new income sources that may eventually generate sufficient income. Drawing up a budget and sticking to it will be immensely helpful.

5. Liquidate assets to pay off loans

Having loans spiral out of control can be a cause of great mental stress. When you are in such situations, get out of the debt by any means would be welcome. If you have any assets, you might want to sell them off and clear off your loans. But, you might want to try this only after a clear assessment of the situation and the debts at hand. 

6. Get protection against unforeseen circumstances

Insurance is an essential tool to safeguard yourself against any unfortunate circumstances. It may be natural disasters or any other event like job loss, disability due to an accident, etc. Insurance will help in meeting the financial obligations in such cases and will save you from further falling into a deeper debt hole.

7. Avoid settlement of loans

Banks offer a settlement of loans when the borrower is consistently not able to meet the EMIs on time or has defaulted in such payments. This settlement is for an amount lower than the total due. This may seem like a good deal but you should opt only as a last resort. Settlement of loans will reduce the loan liability but will negatively impact the credit score. A lower credit score will have long-term repercussions and the borrower may not be able to get any future loans or credit cards. 

Conclusion

A debt trap is one of the most harrowing experiences that can take away your peace of mind for good. While taking loans to meet your needs is a better option than draining your life savings, the important point to remember is to take only as many loans as per your repayment capacity. When there is an imbalance in these two, it will invariably land you in a debt trap, and getting out of it will definitely be a huge task.

How women can step up and take charge of their finances?

For decades, the assumed image of an Indian woman has been that of a saree-clad, bindi-laden, timid individual who is supposed to shy away from any responsibilities other than those of the household and the family. As times change, this image is anything but laughable to associate with the modern Indian woman. 

Today, women in India struggle equally to have a good work-life balance, as their male counterparts. Be it the boardroom, a fighter jet, or even as the lead of a space mission, they have very much been there and done that. But then the question arises, why do most women let men take charge of their finances? Why do a lot of them allow men to be the decision-makers of money matters? Let’s probe into these questions and try to address the growing need for women to control their financial matters.

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6 top tips to improve your Credit Score

A credit score is a three-digit number that lenders use to determine the likelihood of being repaid on time while granting a loan or a credit card. This important financial factor can affect how much and how frequently you can borrow. The higher your score, the better your chances of qualifying for loans at favourable terms. The same goes for credit cards. 

Banks and other credit issuers do not easily lend loans to individuals with a low credit score because they see a higher risk of default in such cases. If you can get a card or a loan despite having a low credit score, then chances are that your credit limit will be low or you may have to shell out higher interest rates. To prevent this, it is advisable to aim for a higher credit score. In this blog, we will explain credit scores along with smart tips to improve your credit score.

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Financial mistakes to avoid in 2021

5 financial mistakes you should avoid in 2021

COVID-19 has driven a lot of importance towards health and wellness. While you might be paying attention to building your immunity and health, are you paying the same amount of attention to your financial wellbeing? After all, your financial wellbeing may have a big part to play in your overall wellbeing and state of mind, right?

Financial success is something everyone should aspire for. But there might be some pitfalls on your way to success that could cost you heavily. 

We bring you 5 financial mistakes that you should avoid in 2021. 

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Life & Lifestyle Lessons from The Ultra-Successful

The super-rich and super-successful are so for a reason. “Habits make the man” is an age-old proverb which only goes to reiterate the fact that you are a function of your habits. Successful people have a few common traits and habits which have played a major role in their success.

These four super-successful humans have discovered different keys to success. Here’s what we can learn from them while we continue working towards the success we aspire for.

Warren Buffer, Chairman & CEO of Berkshire  Hathaway | Net Worth: $76.3 billion

Key lessons: First invest from whatever you earn and plan your expenses with whatever’s left

Fun Facts:

  • Warren Buffet lives in modest home he had bought almost 60 years back.
  • He still uses his retro Nokia flip-phone and has no internet to upgrade soon.
  • He stays away from rich folks’ toys like luxury cars & yachts.
  • Warren bought his first stock when he was 11 years old and still regrets for not having started sooner.

 

mark zukerberg

Mark Zuckerberg, CEO of Facebook I Net Worth $ 54.9 billion

Key Lesson: Your focus on spending will haze your vision for success.

Fun Facts:

  • Mark prefers to wear simple T-shirts and jeans to avoid unnecessary distractions and unproductive use of time.
  • He drives a $30,000 Volkswagen hatchback, which is also pretty efficient in mileage and maintenance.
  • He believes in close-knit rejoice instead of lavish parties

 

carlos slim

Carlos Slim: Mexican Business Tycoon I Net Worth: $ 49.0 billion

Key Lesson: Live a simple yet fulfilling lifestyle.

Fun Facts:

  • Carlos lives in the same house since 40 years. He does own other real estates but has no intentions to shift.
  • Carlos does not spend on luxury vehicles and gadgets. He drives himself to work, every single day.
  • Carlos loves to indulge in home-cooked meals with his family.

 

Azib premji

Azim Premji, Chairman of Wipro Ltd I Net Worth: $ 6.1 billion

Key Lesson: Value utility over cost and focus on getting things done.

Fun Facts:

  • Azim Premji drove modest cars like Ford’s escort and Toyota Corolla before upgrading to a used Mercedes.
  • He flies economy and prefers modest hotels over luxury ones.
  • He does not mind walking his way or taking an autorickshaw to nearby places.

Let’s learn from the best to be the best. Start planning your finance now.

Key pitfalls of investment that every investor must avoid.

“The stock market is a device for transferring money from the impatient to the patient.”
-Warren Buffett

Your investment portfolio should consist of those products that match your needs and works towards your financial goals. Investment is a must these days. Because investments allow an individual to create a corpus, but they also enable us to earn a good return on the savings and can even generate regular income if done right. If you are a first-time investor or have been in the investment game for a while, you should consider these points and that will surely help you in your investment tactics and will also maximize your long term returns.

Mentioned below are the few factors that can help you find the right type of investment:

1. Understanding your financial product

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6 Reasons Mutual Funds

6 investment mistakes to avoid with Mutual Funds

An addition of about 9.74 lakh Systematic Investment Plan (SIP) accounts recorded each month on an average last financial year and an average SIP size of about Rs.3,200 (data according to Association of Mutual Funds in India (AMFI) ), has shown the ease with which people can understand, invest and earn returns with Mutual Funds, thus making it a popular investment option. Also, the fact that investors can choose between Equity, Debt and Balanced funds (which invest in both Equity and Debt), they can invest in funds that suit their investment needs, risk appetite and financial goals. Investments in Mutual Funds help you earn higher returns than Fixed Deposits or your Savings account, provided you avoid these six common mistakes while investing in Mutual Funds:

1. Not Considering Risk
A typical behavior we see amongst investors is “The herd mentality”. Investors do not want to miss on returns, hence come under peer pressure and invest in Mutual Funds that do not suit their risk appetite. It’s very important to do a financial check of your situation and evaluate your investment horizon. If you are a risk-averse investor with an investment goal less than five years, then do not choose Equity Funds instead go for Debt funds. However, if you have longer investment goals (> 5 years) then choose Equity Funds. Remember, only the right Fund would yield the proper Benefit.

2. Investing without a Financial Goal
Have a Financial Goal. It could be saving money for your Child’s marriage or education, or you might want to save for your retirement, or it could be as simple as buying yourself a vehicle. No matter what the purpose is, every Goal has a fixed Tenure. So plan. Any allocation to equity or debt mutual funds must go hand-in-hand with your financial plan and to your inflows. And remember, once you have invested, you must not think about withdrawal until you are nearing your investment goal.

3. Over Diversification
Yes, Diversification is crucial, because Mutual Funds are subjected to market risks and putting all the eggs in the same basket could be tricky. However, at the same time, putting your money into different schemes is not the right solution; instead, you might be investing in several underperforming funds, and it could be a hassle to manage your SIPs. Alternatively, you should invest in a few schemes (4-5 schemes) which provide overall market exposure, and you can easily track your investments.

4.Timing the Market
We are not traders, we are investors. Traders/ Speculators are the ones who need to inspect the market minute to minute. On the other end we as investors, most of us are salaried people and do afford to set aside savings every month. So the best approach to invest in Mutual Funds is through a regular plan, meaning Systematic Investment Plan (SIPs). This practice will let the money grow over the investment tenure and helps you invest in a disciplined manner. Remember, with Mutual Funds, it’s the time in the market that matters and not timing the market.

5. Stopping SIPs when the market is down
It’s common amongst investors to panic and stop their SIPs when the markets are down due to fear of loss. However, investors forget the fact that it is in the bearish phase that you can buy more units at a lower price, and this will help you to achieve your long-term goals. It is important to stay invested with SIPs to reap benefits rather than changing it with the market sentiments. Remember! Every bear trend is followed by the bull, resulting in the recovery of the market.

6.Not Reviewing
It is after all your money at stake. Investors must track the performance of their investments, and it is best that you do it at a regular interval. Failing to do so can cost you a fortune. Make it a habit to conduct a periodical review of all your Mutual Fund schemes; this not only helps you to track the funds in your portfolio but also helps to get rid of the ones that are underperforming.

“Successful investment is about managing risk, not avoiding it. “
Benjamin Graham