Category: Personal Finance

Have you started talking to your kids about money? Here’s why you should teach your children about personal finances at an early age. 

Kids are way smarter than you anticipate. In fact, children grasp knowledge faster than adults. Their shaping years are the perfect opportunity to teach them about money management. 

School curriculum may not have finance lessons, but you can take the initiative.

Today’s small money talks are going to help them in the long run. So let’s explore simple steps to teach your kids about money.

How to Teach Your Child The Value of Money Management?

1. Teach Your Child How Money Works

Introducing your child to the currency can be your first step. 

You can try a simple fun activity. Ask your child to separate the coins and notes of up to Rs. 50 to begin with. 

Kids learn basic additions/subtractions very early in their school curriculum. You can ask the child to add the total money. 

That way, your child will understand how to use the money they have.

2. Take Your Kids to The Market with You

Take your child with you for groceries and vegetable shopping. That would be the right place to show your kids how to buy things with money.

Children love it when you ask for their opinions. Maybe, you can make them select a vegetable or a fruit of their choice. Encourage them to talk to the shopkeepers about prices.

Your regular mode of payment could be credit cards or UPI. But, for the sake of your child’s understanding, you can pay with cash.

That way, your child will understand how to pay and get the change back from the shopkeeper. 

This fun supermarket activity can teach your child the real-world usage of money.

3. Give Your Kids a Piggy Bank to Save Money

Money saving is crucial learning that’ll stay with your child forever. 

These days, various banks offer special banking for children to learn the whole experience. Parents can take responsibility for the bank account and set transaction limits. 

But you can start with a piggy bank.

The remaining change from the shopping you did together can go in the child’s piggy bank. Make your child understand the importance of saving money.

You can also set a milestone. For example, if your child is asking for a new toy, make them save for it. That way, they’ll value the money and the new toy. The delayed gratification will give them much more joy. 

4. Don’t Impulse Purchase Toys, Gadgets, or Accessories for Your Children

Kids replicate their parents’ behavior in every possible scenario. It won’t set a good impression if you fulfill their demands every time.

As much as you want your child to have every happiness in the world, you’ll have to be reasonable. 

Not just toys, anything that you buy will attract your child’s attention. It is crucial to make them understand the importance of wants vs needs. 

5. Teach Your Kids How to Effectively Manage Their Allowance

You are giving your child an allowance for their day-to-day needs. Instead of deciding the amount yourself, sit with your child to make a budget.

Together, you can write down what they might need to buy in a month. Create a list and set the appropriate budget.

That way, your child will know how to manage their allowance. The budget list will give them a clear idea of how to carefully spend the money.

6. Plan for Your Children’s School/College Fees

The concept of teenagers earning some money in summer vacations isn’t common in India. That decision depends upon you and your child. 

If your teenager wants to earn some money to save for college, that can be a good idea. Otherwise, you can sit with your child to discuss school/college fees. 

Making them aware of the education cost is important. If your child wants to contribute, you can help them figure out safe and simple ways to earn money.

Note: This subject can be tricky to handle. Kids might spend the money they earn carelessly. On the other hand, it can also teach them the importance of hard-earned money. So you may want to proceed with caution. 

7. Gradually Expand Your Children’s Financial Knowledge

Accompany your children in their financial journey. From teaching them to save money to helping them kickstart their investment portfolio when they grow up. 

Academics may not teach your child real-world finances. So you and your child together can navigate the world of finances by researching or talking to experts.

Talk about finances in your family. Make everyone involved and take everyone’s opinion into consideration.

You can consider hiring a financial advisor for your family who can help you set goals. 

Final Words

When was the first time you started learning about money management? Maybe your relative gave you some money to buy ice cream. Or your grandparents gave you coins to put in your piggy bank.

The small things you do with your money early in your life can set the base. That’s why it is important to talk to kids about money management. 

It’s never too early or too late. You can begin today, even if your child is 18+. 

Gaining financial knowledge and having financial goals define your lifestyle. And you can be your child’s finance friend. 

If you want more guidance on personal finance and investments, give VNN Wealth a call. Our advisors would be happy to help you.

Read More Insights on Personal Finance.

Financial freedom isn’t far when you have an expert handling your investments. A Financial Advisor can speed up your journey to achieve your dreams faster. 

In the era of Robo-Advisory, the majority of investors are still seeking advice from financial planners. 

In fact, 53 Lakh demat accounts became inactive between 2022 and 2023. The reason is quite simple. DIY investment apps and FinFluencers aren’t qualified enough to guide you in the right direction. They cannot help you beyond a certain limit. 

Tomorrow when you are stuck, only an experienced advisor can guide you. But that is only possible when you are transparent with them.

Your advisor can provide calculated advice only when they know you better. So here are some things you need to tell your advisor without hesitation. 

Things You Should Tell Your Financial Advisor

1. Your Financial Assets

Your financial advisor would want to know about your financial assets. This includes your investments across various instruments like Mutual funds, FDs, Bank accounts, Gold/Silver, Real estate, and everything else.

Better not to hide anything. Otherwise, your portfolio analysis may show different outcomes. 

Your financial planner will review your portfolio to understand risk tolerance or duplicate investments. This will help them provide a custom investment plan. 

2. Your Liabilities, Debt, and Existing EMIs

Aren’t EMI deductions annoying right after your salary lands in your account? Welcome to adulthood. 

Fortunately, there are multiple ways to ease up EMIs and liabilities. 

Tell the exact numbers to your financial advisor. They’ll outline a sustainable strategy to comfortably transact EMIs, clear debt, and save funds for emergencies. 

3. Major Expenses and Your Financial Goals

A wedding, purchasing a property, or children’s education abroad can be major expenses. You may have to take a loan and figure out the repayment installments.

But, you can invest in various funds/schemes to comfortably handle these expenses. That’s something you may not be able to figure out on your own. 

A financial advisor will align your investment horizon depending on your planned expenses and goals. 

A quick example: If you want to buy a car in the next 6 months, then Ultra Short Duration Debt funds would be helpful. But if you are planning for retirement, then you need a combination of long-term Equity Funds, Debt Funds, and other schemes. 

4. Your Family

It’s understandable to not want to share personal details with anyone. However, your family is a part of you. 

Being able to provide the best life for them is a dream for all. And you can fulfill that dream by aligning your finances accordingly.

Talk about your family and their potential expenses with your advisor. They’ll help you afford the best life for your loved ones.

Don’t forget to include your children’s education, healthcare, and overall lifestyle. They are going to be your successors someday. It is wise to inform about them to your advisor. 

If you have a special child, the advisor will assist you with setting up a trust with specific instructions to take care of them even in your absence.

Knowing everything about your family will ensure a thorough financial plan.

5. You and Your Family’s Health

Hospital bills can put a solid dent in your savings. All your hard work can wash away because of poor healthcare planning.

Don’t worry! You can create a healthcare plan and emergency funds with the help of your financial advisor. For that, you should inform them about existing health conditions. 

Maternity planning can also be discussed with your advisors. Having a child can be expensive. Might as well be financially ready before bringing a new life into the world. 

A well-outlined healthcare plan can save you headaches. 

6. Your Spending Habits

What’s your monthly expense? Where do you spend the most?

Spending habits can make or break your savings. But that doesn’t mean you have to cut down on spending on things you love.

You can spend comfortably by strengthening your financial plan. Discuss your spending habits with your advisor. Have a chat with them about how you can spend without burdening your savings. 

Be open to cutting down some expenses that do not cater to your growth. Your advisor will analyze your spending and guide you with sustainable budget planning. 

7. Ask Questions

Financial Advisors essentially design an investment plan suitable to YOU. They’ll encourage you to ask as many questions as you want.

If they don’t, then there’s a problem. A good financial advisor will always give you their time. They’ll avoid conflict of interest and prioritize your expectations. 

Note down all the concerns you may have. Sit down with your advisor to explore possibilities. 

You may like to read:

What to look for in a financial advisor.

5 reasons to break up with your financial advisor.

How Much Fee Does A Financial Advisor Charge?

Financial Advisors at VNN Wealth DO NOT charge any fees from investors. We make our money from Mutual Fund houses and not from our clients.

Final Thoughts

Would you hide your symptoms from a doctor? No, right? Because that will change the diagnosis. And you won’t get the right treatment. 

Similar is the case with your finances. The more transparency you create with the financial advisor, the better outcomes you’ll receive.

Of course, the first step is to choose the right financial advisor. Look for an advisor with the right knowledge and licenses. Make sure they are focusing on YOUR goals and not their benefits. 

Keep an active communication with your advisors. Ask them to show the results on a regular basis. 

Today is the day you declutter your finances and start building wealth.

Why does Systematic Transfer Plan works best for Gig Economy? Let’s find out!

Finances are a bit tricky for Freelancers/Self-employed individuals. 

Fun! But tricky.

Some months you get paid really well. Some months are not that great. And the best months are those when a big lumpsum payment comes through. Drum Roll!

Getting paid for your skills and creativity via gigs is pretty cool. Congratulations, you are running a profitable business. 

But that’s only the half battle won. The other half is managing that money.

With income coming from different streams at a variable frequency, investing each month is not reliable. SIPs are almost out of the picture. Though, investing a lumpsum amount in a single scheme is also risky. 

What if…you get SIP-like features by investing a lumpsum amount? 

Sounds interesting? Alright, we gotta talk about this. Read along!

What is a Systematic Transfer Plan?

STP allows you to move money from one scheme to another in installments at preferable intervals. You get to enjoy the returns on both schemes.

Investors prefer STP when they have a lump sum amount to invest. 

STP is somewhat similar to SIP. While SIP deducts money from your savings account, STP deducts the amount from the source mutual fund. 

You may like to know the benefits of SIP.

How Does STP Work?

In STP, your lumpsum amount gets invested in a mutual fund of your choice, called a source fund. You can set a specific amount and the frequency at which your money will be transferred to one or more target mutual funds of your choice. 

Note- Both source and target schemes must be from the same fund house. 

At regular intervals set by you, your money will go from the source scheme to the target scheme in installments.

We would recommend liquid debt funds as your source scheme and equity mutual funds as a target scheme. Debt funds are often less volatile than equity funds. You will earn decent returns, which are higher than any saving account. And equity funds, even though slightly riskier, can deliver higher returns long-term. 

Benefits of Systematic Transfer Plan

1. Possibility of Higher Returns

You get the best of both source and target schemes with STP. 

Liquid debt funds invest in debt instruments with short-term maturity and decent returns. While your savings account will give you a 4% interest rate, debt funds may offer 6-7%. 

With a slight risk, equity funds may deliver superior returns than debt funds. Collectively, you have the possibility to earn superior returns on your lumpsum amount. 

2. Balanced Risk and Returns

Market volatility is an inevitable part of investments. Of course, there will be some risk involved.

The good news is, STPs can balance that risk and returns by shifting your money into safer investment avenues. 

When the market is not in your favor, you can shift your installments into safer equity funds such as large-cap. Or money market schemes. 

3. Rupee Cost Averaging

Similar to SIP, STPs also have rupee cost averaging. Fund managers will buy more units when the NAV is low and fewer units when NAV is high. 

When the unit prices increase even further, selling units would be more profitable. 

Tax Implications

Each transfer from a source scheme is considered a withdrawal. Investors have to pay a certain tax per transfer.

• If the source fund is an equity scheme: You will have to pay a 20% tax for short-term capital gains (funds redeemed within a year). Long-term capital gains (funds redeemed after 1 year) will be taxed at 12.5% above 1.25 lakhs. 
• If the source funds are debt funds: Both short and long term capital gains are taxed as per the investor’s tax slab.

Things to Consider Before Starting a Systematic Transfer Plan

1. Source and Target Scheme

You can choose any type of debt or equity scheme as your source and target scheme(s). Fund houses have various mutual fund schemes for you to explore.

Equity scheme targets are suitable for investors with moderate to high-risk appetites. Otherwise, you can go with safer instruments. 

Don’t forget to align your investment goals and portfolio with the schemes that you select. 

Get a complimentary portfolio analysis with us. Our advisors will help you select the right schemes.

2. The Frequency and Amount of the Transfer

Fund houses often have weekly, monthly, quarterly, and even yearly STPs. Make sure you understand all possible options before setting the frequency and the amount of transfer.

NOTE: Once you invest a lumpsum amount in the source fund, you can start STP even after 6 months or a year. The transfers can start/stop/change later on.

3. Investment Horizon

Sabr ka fal meetha hota hai!

Returns on mutual fund investment take time. We would recommend holding your investment for a longer duration. Preferably 3-5 years or more.

4. Expected Returns

Returns on mutual funds vary with market trends, fund performance, taxation, exit load, expense ratio, and more. Knowing the above parameters will help you understand the expected returns. 

Conclusion: Why Should Freelancers Invest In a Systematic Transfer Plan?

Freelancers have a wide spectrum of payment structures. Month-end salaries are not a part of the gig economy. 

Managing payments, filing taxes, and planning investments can get complex when payments vary. 

STPs make the investment part quite easier as it allows lumpsum investment followed by installments. The definition of a lumpsum amount can be different for everyone. Please know that you don’t have to have lakhs to start STP. 

Many fund houses have a lower threshold on source fund investment. You can take benefit of liquid funds as well as equity funds.

If you are still confused, feel free to reach out to our advisors. Our experts will help you plan a suitable STP with the amount that you are comfortable with. 

The earlier you invest, the better returns you will earn! 

Get more Personal Finance Tips and Mutual Fund Tips with VNN Wealth. 
 

Are you stuck with a bad financial advisor? Maybe it is time to part ways!

Nobody enjoys breaking up with someone. Unless it’s your financial advisor who’s no longer being helpful.

In that case, you should immediately break up with your financial advisor. You are working hard to earn money and build wealth. And if the advisor is not on the same page as you are, then it’s time to call quits.

Below are a few reasons you may want to fire your financial advisor.

Top Reasons to Break Up With Your Financial Advisor

1. Lack Of Communication 

Communication is the base of any relationship. Without it, misunderstandings will only grow. 

Financial advisors should maintain frequent communication with you. It’s their job to understand your financial goals and lay wealth management options in front of you.

It’s a red flag if your advisor won’t answer your calls or emails, or simply doesn’t keep you informed.

You need someone who keeps you posted about your investments and market trends. If you don’t get that from your advisor, get a new one. 

2. The Advisor is Making Unrealistic Promises

We said it before and we’ll say it again- Nobody can guarantee market performance. Sure, sometimes predictions do come true with analysis. 

But you cannot rely on promises that seem too good to be true. The stock market is uncertain. Advisors can enlighten you with some insights. However, they cannot guarantee how much returns you’ll earn. That depends on so many external factors affecting the market. 

Don’t fall for fake promises. Instead, look for an advisor who can show you a realistic scenario. 

3. The Advisor is Not Aware of Market Trends 

Understanding the market and aligning your investment is literally the whole job of an advisor. 

The market study is a crucial part of a financial advisor’s job. If your advisor is not passionate about the market and finances, they can’t help you.

You are trusting them with your money. And you, essentially, want to save the hassle of keeping up with the market trends. 

If your advisor is not able to answer your questions or doesn’t know where to plan your next investment, there’s no point in keeping them.

4. The Advisor is Not Paying Attention to Your Financial Goals 

Every individual is different and so are their financial goals. Financial advisors must understand your financial goals before sharing any insights. 

The advisor should make your financial goals their priority. Even better if they can help you get beyond your goals, which is possible with the right advice. 

There shouldn’t be even the slightest conflict of interest. At the end of the day, it’s your money and your wealth goals. And if you don’t see that happening with your advisor, you have all the right to break up with them.

5. The Advisor Doesn’t have the proper licenses

This is a major red flag. Immediately break up with your financial advisor if they don’t have a proper license. 

Taking financial advice from a non-licensed individual is as good as asking your friend where to invest. Your friend doesn’t understand your financial situation and neither would an advisor without a proper license.

God forbid, if something goes wrong, these advisors won’t be able to help you. 

A simple way to find out if an advisor is smart enough is, ask them what trends are going on in the market. If there’s no glint of shine in their eyes as they talk about the market, they aren’t made for it. 

Now that we’ve discussed enough reasons to break up with your financial advisor, let’s look at it from a different angle.

How to know if the Financial Advisor is Good for you?

You probably know the answer to the question from the above points. 

The right financial advisor:

1. Has a thorough knowledge of industry trends and market performance. 
2. Will only make realistic promises that include a long-term investment plan rather than quick money-making schemes.
3. Prioritize your wealth goals and knows where to invest your money.
4. Keeps you informed about the cash flow in your portfolio. 
5. Has the proper licenses for the financial instruments they are selling.

Read more about how to find a good financial advisor.

Conclusion: Do You Even Need a Financial Advisor?

Yes. Absolutely!

You might be aware of mutual funds and the stock market, crypto even. But you cannot optimize your investment portfolio with a simple Google search or reading Twitter threads. 

Finance is more complex than it seems. You will get tired of keeping up with all your investments.

Instead, a financial advisor can take over your portfolio and make smart decisions for you. Of course, your say in it is above the advisor’s say. 

Having a dedicated financial advisor will save you a lot of time. And, it’ll also improve your chances of achieving your financial goals. 

The cost of home ownership goes beyond the price of the flat or the cost of the land and construction. From stamp duty to parking space, you may have to write a check everywhere.  

It can get intimidating to think about those extra expenses. Having a general idea of the overall cost beforehand can make the process a lot easier.

So, are you planning to buy your dream home? You must have a Pinterest board full of ideas.

That’s great. Have you calculated how much you’ll spend on a home?

In this blog, we’ll walk you through a list of things to consider before purchasing the house. 

Top 8 Things to Know Before Buying a Home: Actual Cost of Home Ownership

1. Down Payment and Home Loan

The first thing you’ll need to buy a house is a home loan and a down payment. The down payment is the percentage of the property’s total value that you pay to secure the deal. It ranges from 10% to 30% of the total value.

You can take a home loan for the remaining amount. Home loan interest rate varies depending on the lender. Consider getting a loan from a trusted bank. 

2. Brokerage 

Most properties in India are sold via a broker. Brokers help you find your dream home, ease the entire process, and take a lot of hassle away from you.

For this, they may charge 1-2% of the total value as a fee from both buyer and seller. 

The brokerage could be saved if you make a direct deal with the seller/builder or opt for no-brokerage platforms. 

3. Preferential Location Charges

Apartments with gardens attached, or houses facing the view cost more than any other basic apartments in the same society.

These charges depend on the locality and the developers.

Many societies offer gardens, gyms, pools, and more amenities. Of course, the flat will cost more and the maintenance charges will also be high.

We’d recommend evaluating the preferential location charges before finalizing the house. 

4. Parking Space 

Parking spaces are limited considering every family has more than one vehicle. If you are buying a flat in a city, you may have to buy/rent the parking space. 

One parking spot may not be enough if you have multiple vehicles. So you’ll have to consider the total charges for a comparatively larger parking spot.

The charges vary from city to city and locality to locality. To give you a rough estimate, it could be between INR. 1 lakh to 15 lakhs. Or, approx. 10k/month as rent. 

5. Stamp Duty and Registration Fee

Home buyers need to pay a certain amount to the government in the form of stamp duty and registration. 

These charges can put a massive dent in your home budget. In India, stamp duty varies between 4% to 7% of the total property value along with 1% registration fees.

Each state and city in India have different stamp duty and registration charges. Don’t forget to check it beforehand to add it to your house budget. 

6. Maintenance Charges

Living in a society, you’ll have to pay maintenance charges each year. These charges cover the maintenance cost of all the amenities like a swimming pool, gym, garden, running elevators, security, cleaning, and more.

These charges vary across states, cities, and localities. Confirm the range of charges with the society to ensure it fits your budget. 

7. House Inspection

If you buy a flat in a brand new society, the safety measures would already be in place. But, if you are purchasing a flat for resale, you may want to consider the inspection.

Older houses tend to need frequent repairs and maintenance. It could cost you a huge deal later on. Better to be thorough than panic when a problem arises. 

In fact, you can hire a professional to inspect both new and old properties. It’ll help quicken your decision-making process. 

8. Setting up The House

Here comes the opportunity to design your home the way you always wanted. Getting the right furniture, appliances, and decor is an additional cost.

Fortunately, you have the option to control this expense. You can seek a good deal on furniture in both online and offline stores. Even appliances and decor would be affordable if you set your eyes on the right products.

Set a budget for the home decor to effectively shop for what you need. 

Final Thoughts

Owning a home is not a one-time cost. It can come with a lot of hidden and unexpected costs. Apart from the points mentioned above, there’s also the cost of plumbing, roofing, and repairs. 

We encourage you to jot down all possible expenses to stay aware of the total cost of home ownership. Divide the home loan and down payment as per your comfort. Don’t forget to consider EMI and tenure.

To make your dream home a reality, we’d also recommend creating a dedicated investment portfolio. Our advisors will help you curate investments so you don’t have to compromise on your dream home. 

Get in touch with us and we’d love to hear your ideas for the home. Take advantage of our complimentary portfolio analysis to receive personalized investment recommendations from our advisors. 

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7 Quick Financial Fixes 

5 Money Mistakes to Avoid

Get Personal Finance Tips

Financial mistakes can happen even when you have a wealth plan. 

Money management can be complex. In the roller coaster of building wealth, many people get trapped in the biggest financial mistakes.

Don’t worry. We are only humans. Any mistake can be solved with the right knowledge and tools.

Let’s shed light on some of the common financial pitfalls and how to avoid them.

Get a cup of tea. We have some important decisions to make. 

Common Financial Mistakes And How to Avoid Them

1. Don’t Blindly Follow the Crowd

Doing what others are doing is human nature. You try out a new restaurant because your friends like it. Or you watch a Netflix show because an Instagram influencer recommended it.

Taking recommendations is fine as long as they are benefiting you. 

But you may wanna be careful with your money. 

Your money goals are different from someone else’s money goals. It could be tempting to invest in something your friend benefited from. But the chances of you gaining the same returns as your friend are very low.

Seek opinions from the experts instead of your friends or relatives who may not have your best interest at heart. 

Create a wealth goal for you and your family. Sit with a financial advisor to plan your investment portfolio

2. Stay Away From Get-Rich-Quick Schemes

Have you watched Hera Pheri? Then you must have seen the mess Akshay Kumar creates with ‘25 din me paisa double.’

If it was that easy, everyone would be rich. 

In the world of the internet, scammers are on the lookout at every corner. Even educated people fall for quick-rich schemes and end up losing money. And the reason is, these schemes know how to pitch the idea.

But don’t let them get to you. If a scheme promises unrealistic outcomes, it is probably shady.

Focus on building long-term wealth. Outline a retirement plan. Invest in mutual funds for a long tenure. Build a diverse portfolio by exploring various investment avenues. 

Be patient while your money brings more money.

3. Don’t Keep Your Money Lying in Savings Account

A lot of people don’t want to invest and lock in their money. The primary reason they keep the money in their savings account is- What if I need this money tomorrow for an emergency?

Fair enough. But the drawbacks are: 

• You don’t earn enough returns. 
• You may end up spending more just because you have money in your account.

If you are worried about long tenure, liquid funds, or short-duration debt funds allow quick redemption with minimal exit load. 

Create a separate emergency fund. Make your money work for you by investing it in instruments that better suit your risk appetite and money goals.

4. Trading is Not Investing

You’d think the quickest way to earn money is trading. But it is also the quickest way to lose money.

You will have to be accurate both while buying and selling to earn maximum returns. And the probability of winning won’t be in your favor all the time.  

Nobody can predict market movements accurately. Rather, create a long-term sustainable plan. Evaluate your expenses against your investments. Build a portfolio to support the kind of lifestyle you want to achieve. 

5. Fix Bad Spending Habits

What was the last thing you purchased? Was it value for money? 

Poor spending habits are one of the primary causes of losing wealth. You buy things just because you can. 

Do you really need that extra pair of branded shoes? Or that designer handbag that doesn’t even have enough space?

Separate your wants and needs. Purchase items that you are really going to use. You don’t want to live an extravagant lifestyle that can empty your pockets quicker than you imagine.

Instead, create SIP and set an auto-debit for the first week of the month. Put money in a PPF account or in mutual funds.

Corporate FDs are also a great way to lock your money and earn decent returns. 

Dos of Building Wealth

After discussing the don’t of building wealth, let’s quickly explore the Dos.

1. Set a financial goal that includes your personal expenses, wedding, house, car, education, and retirement. 
2. Start investing early. Benefit from the investment avenues that expand your wealth over the years.
3. Understand how taxation works and invest in tax-saving instruments.
4. Diversify your portfolio to balance the risk and returns.
5. Hire a financial advisor to take the money management load off your shoulders. 

Final Words

Are you taking the right actions to build wealth for yourself and your family?

We hope the above Dos and Don’ts of wealth building will guide you in the right direction. Analyze your finances to find the money mistakes you are making with or without your knowledge.

Financial mistakes are easy to make and difficult to fix. Better to set things right before it’s too late. 

If you need any further assistance, our team would be delighted to help you. Write to us with your concerns, get your portfolio reviewed for free, and plan your next move. 

Explore more personal finance tips.

Time to improve your financial situation with quick financial fixes.

People often procrastinate on exercise, chores, and finances. Things could go out of control before you know it.

We are here to save you from the trouble of being financially devastated. 

When you seek quick financial fixes, you’ll probably come across generic options. Keep track of your expenses, pay credit card bills on time, shut down unnecessary subscriptions, and save more.

While these options are useful, we are going to discuss more effective solutions. 

Buckle up! Let’s set your financial goals straight. 

7 Quick Ways to Fix Your Finances

1. Create a Public Provident Fund (PPF) Account

You can create a PPF account in any bank or post office using net banking. The account activation shouldn’t take more than one working day.

PPF scheme is a long-term wealth-building and tax-saving scheme. It allows you to invest anything between INR 500 to 1.5 lakhs per financial year. The interest rate on PPF can be higher than the savings account and the FDs.

The lock-in period for the PPF account is 15 years. Though you can make a partial withdrawal after 5 years. Or you can get a loan against the PPF account whenever needed.

If you invest 1.5 lakhs in a financial year, you get tax exemption under section 80C of an IT act. 

Put money in PPF before the 5th of April to earn interest on the whole amount throughout the year. 

Read more about the benefits of PPF. 

2. Invest in ETF instead of Physical Gold/Silver

Investing in physical precious metals is very common in Indian households. 

Three primary problems with that are- 1. The making charges. 2. Buying and selling are not quick. 3. Sentimental values attached to it.

Simplify the whole process by investing in Gold and Silver ETFs. Not only is it easy to buy or sell, but you may end up earning more returns. There are no making charges. And you don’t have to worry about keeping them safe or shedding a tear or two when you sell them.

3. Add 10-15 Extra Years to Your Retirement Plan

People often create a retirement plan for 70-80 years of life span. But what if you are blessed with a longer life span? Would your retirement plan cover those additional years?

At the age of 75+, your expenses could be more than what they are when you are 60. 

It’s better to have a longer retirement plan, especially for women. Studies show that women live longer than men. 

Add at least 10-15 extra years into your retirement plan.

4. Get a Health Insurance

Health insurance should be your top priority while fixing finances. Medical emergencies can occur at any time with anyone and can create a huge dent in your savings. 

Without health insurance, you are looking at massive bills. You may or may not have such a huge emergency fund. 

To avoid breaking your funds, get health insurance. Better if you get it in your 20s or early 30s. 

Note- Health Insurance also offers tax exemption on 1.5 lakhs under section 80C of an IT act.

Find our more tax-saving instruments. 

5. Close Multiple Bank Accounts

We have a client who and his wife had ten different bank accounts. Some of them were their savings accounts and the majority were salary accounts.

They realized they weren’t able to keep track of so many accounts. And collectively, they had a lot of money lying around in accounts that they could invest.

Eventually, we asked them to shut the majority of the accounts and keep only two to three. Now they are able to manage their money quite easily. They expanded and diversified their investment portfolio as well.

If you have multiple bank accounts, shut them off. Don’t keep the money in a savings account. Invest it in mutual funds, put some in PPF, or create FDs if that’s what you prefer.

6. Don’t Spend Extravagant

Are you an aggressive spender?

Unhealthy financial habits are the primary reasons behind bad financial health. 

You see money in your account and don’t think twice before spending it. Spending habits can go out of control. And by the time you realize it, you have no money to invest.

To save yourself from poor spending habits- Create SIP and your first transaction after you get a salary should be towards SIP. 

If you have multiple credit cards, enable auto-pay to pay the full amount. Instead of buying unnecessary things, put your money to better use. 

Check out the top 5 financial mistakes to avoid.  

7. Get a Financial Advisor

A professional and experienced financial advisor can help you meet your financial goals and suggest options to fix your finances. 

Having a financial advisor by your side will save you a lot of hassle in managing your money. Building wealth is not as easy. You most certainly would need someone’s help. 

However, be aware of advisors who do not have the appropriate licenses or market experience. Here are a few tips for choosing the right financial advisor. 

Don’t hesitate to dump your financial advisor if they are not on the same page as you. 

Final Thoughts

Building wealth takes years of hard work and consistency. One could ruin it in a blink of an eye if not careful. 

Then it’ll take years to get back on track.

Follow the above easy and quick financial fixes. Most of them can be done in a day or two. Have a clear vision of your money goals and keep following them.

Interested in knowing your risk appetite? Get complimentary portfolio analysis with us and our advisors can recommend investment opportunities to achieve your financial goals. 

March is the month to sort out your personal finance if you haven’t already. The FY 2023-24 is about to end and we have things to do before 31st march. 

We Indians love to keep things for the 11th hour. Ha bhai kar lenge is our mantra. 

But…now we have a few days left to complete financial year-end planning. 

So, keep your laptop handy, we are going to do it right now!

Top 5 Things To Do Before 31st March

1. Link Your PAN to your Aadhaar

First thing first, link your PAN to your Aadhaar if you haven’t done it yet. Failing to do so will make your PAN inoperable in the next financial year.

The easiest way to link the two documents together is via the Incometax Portal.

On the portal, Locate the ‘Link Aadhaar Status’ under quick links on the menu. Enter your PAN and Aadhaar and Click on View Link Aadhaar Status. If it is linked…Congratulations. 

If not, the portal will redirect you to the page to link your documents. You may have to pay a 1000 Rs. late fee. 

Note-> The deadline has been extended till June 30, 2023. 

2. Add Nominee Details for Your Mutual Funds Investments

Adding nominees to your Mutual Funds will only take a couple of minutes. 

Complete the task before 31st March to avoid freezing your investment. You may not be able to transact without the nominee declaration.

Steps to Add/Update Nominee:

• Go to the CAMS Portal
• Enter Your PAN number and Click Next
• It’ll show you the mutual fund investments linked to your PAN.
• Select the one (or all) where you want to Add/update the nominee
• Proceed with OTP verification
• You will come across a form to add one or more nominee details.

The change will get reflected within a few hours. 

Note-> The deadline has been extended till September 30, 2023. 

3. 80C TAX-Saving Investments

Taxation is probably the most tiring task. But you gotta do it to save the tax.

Invest in Tax saving instruments before 31st March to get tax exemption. Our advisors have curated a list of tax-saving investments under section 80C of an IT act. 

Note- If you already have a PPF account, don’t forget to make one installment for the current FY, anything between INR 500 to 1.5L. 

4. File an Updated ITR for FY-2019-20 (ITR-U)

The last date to correct/update the ITR for FY-2019-20 is 31st March 2023. 

If you want to make any changes to your ITR for FY-2019-20, the ITR-U form is for you. You can make the relevant changes and re-submit the form. Though you may come across some late fees during the process.

5. Book Long Term Capital Gains

Long-term capital gains up to Rs. 1,00,000 are eligible for tax exemption. Gains (long-term) over and above INR. 1,00,000 are taxed at 10%.

Here’s how you can lower the tax amount with a strategic withdrawal when close to 31st Mar: Instead of withdrawing all your mutual fund gains at once, make a partial withdrawal – break it into 2 parts. Before 31 st Mar and after 31st March.

For example, let’s say you have invested 10 lakhs and have earned 3 lakhs gain. Out of 3 lakhs, 1 lakh will be tax-free. But you’ll have to pay 10% on the remaining INR. 2,00,000, which is INR. 20,000 if you withdraw all of it before 31st Mar. 

Instead, you can redeem half this financial year i.e. INR. 1,50,000 (in the above example) and pay tax on only INR. 50,000, which is INR. 5,000. Repeat the same at the start of the next financial year. 

By withdrawing the investment in two halves, you only paid INR. 10,000 tax instead of INR. 20,000. 

If you are planning to book profits anytime soon or redeem your investments, make use of this since the financial year is about to end, you can redeem partial investment before 31st march. And the remaining can be done on 1st of April when the new financial year starts.
 

See? That wasn’t so difficult, was it? Enter the new financial year with zero headaches, well-planned personal finance, and new money goals.

Be sure to analyze your investment portfolio to understand tax liabilities. If you have any queries regarding Mutual fund investments, taxation, and better wealth management, give us a call. 

Our advisors will outline an investment plan matching your goals for the upcoming financial years. The earlier you invest, the better outcomes you achieve.

Check out more blogs on personal finance to plan your investments accordingly. 

CTC and In-Hand salary is, by far, the most inevitable and annoying truth of the professional world. Right?
Many new professionals divide their CTC by 12 assuming that would be their salary. 
Happiness goes over the moon but falls back down when the actual amount is way lesser than the sweet assumption. 
In this article, we will discuss each component of your salary structure to understand CTC and In-hand salary.
It’s time for you to thoroughly explore your salary breakdown. That’s where all the knowledge of taxable and non-taxable amounts resides.

Let’s begin…

What is CTC or Cost To the Company?

As the name suggests, it is the amount that a company has to pay to hire an employee. 
CTC is a combination of basic salary, provident fund, various insurances and allowances, gratuity, and sometimes, bonus. CTC also includes the Tax that will be deducted from your salary based on the tax slab.
Often companies offer individual or family health insurances that you can use.  Allowances can be for food, internet, housing rent, cab services, petrol, or anything.
All these things vary from company to company and employee to employee.

What is Gross Salary?

Gross salary is what you get by adding the basic salary, HRA, and other allowances.
Again, this is not your net salary. A tax will be deducted from the gross salary to, finally, calculate your net/in-hand salary.

Let’s take a rough example of 6LPA as a CTC throughout this article. 

Gross Salary Includes the following things-

1. Basic Salary

The basic salary is around 35-45% of your total salary. It could be higher in some cases.
This is the amount that you get paid for the job you are doing with your skillset. The basic Salary is a fixed amount, which differs from employee to employee.
Note that the Basic Salary is 100% taxable. That means you cannot claim tax over basic salary.
For the sake of example, let’s assume that your basic salary is 45% of your total salary. According to 6 LPA, it would become 22500/month or 270,000/year.

2. House Rent Allowance

Companies often offer HRA to cover your rental living arrangements. 
HRA could be-

• 10% of the basic salary.
• 40% of the basic salary if you live in a non-metro city.
• 50% of the basic salary if you live in a metro city. 

You can check your HRA from the salary slip to know which of the above three is applicable to you. HRA is a fully taxable amount under section 10(13A) of the income tax act unless you have proof to claim it.

You can use a rental agreement signed by your landlord as proof to claim HRA. Let’s consider your HRA is 50% of your basic salary. That would make it 11250 INR per month.

3. Medical Insurance

You will also get medical insurance in your gross salary. Most times, your parents, spouse, children, or all would be included in the insurance.
You can claim the insurance benefits by showing medical bills and reports. 

Tip- Medical emergencies can occur anytime. Always understand the whole process of claiming your medical insurance beforehand. It will speed up the process in case you need it.

Let’s say your Medical allowance is 1300 Rs/month.

4. Special Allowances

This includes food, internet, cab services, or anything that the company has to offer additionally. The amount you get for each special allowance varies from company to company.

If you don’t end up using it, this amount is also taxable. If you use the partial allowance, the remaining amount will be taxable.

To save the tax, you can show proof that you, as a matter of fact, have been using these allowances. 

Keep all the bills throughout the year to submit as proof.

For example, let’s assume your special allowance is 6000 Rs/month.

5. Gratuity 

Gratuity is sort of a loyalty bonus. Employees receive it either on retirement or after completing certain years in the company.

Say your company will offer a certain amount after you complete 5 years in the company. You will only get that amount if and only if you work in the same company for 5 years.

6. Bonus

Some companies offer various kinds of bonuses such as performance bonuses and festive bonuses. This amount is also taxable. 

7. Employee Provident Fund

The Employee Provident Fund is a long-term saving plan for your retirement. Both you and your employer contribute to your EPF account each year in agreement.

EPF contribution= Employee Contribution (10-12% of salary) + Employer Contribution (12% of salary)

You can withdraw money from EPF whenever you need it. But you may earn decent returns on it if you hold it for the long term. Let’s say you put 12% of your salary into EPF.

It would be around 4000 and will be deducted from the salary.

Earlier, EPF contributions and the interest earned used to be tax-free. Now the government has changed the rules.

According to new rules-

• Employees have to pay tax on the interest earned on contributions above 2.5 Lakhs/year. This means interest earned on the contribution up to 2.5 lakhs will be tax-free. Please note that employers do not have to pay tax for their 12% contribution.
• If an employee is the only one contributing to the EPF, the same rules apply but for the threshold of 5 lakhs.

Additionally, you will have to pay 10% TDS as per section 194A of the IT Act on taxable interest above the threshold. 

8. Professional Tax

Professional Tax is an amount your employer directly deducts from your salary. It will depend on the tax slab you fall under. 

The company can only deduct up to 2500/month as a professional tax. It varies from state to state in India.

For example, 

Professional Tax Deduction In Maharashtra

Salary Per Month	Professional Tax
Salary up to 7500 (Men)	No Tax
Salary Upto 10000 (Women)	No Tax
Salary Between 7500 – 10000	175 Rs
10000+	200 Rs

Now let’s finally come to the In-hand Salary

What is In-Hand Salary?

Your In-Hand salary or the net salary is what you take home. 

In-Hand Salary = Gross salary – all the deductions

From the above examples, your gross salary becomes = 45000 + Bonus (if any) + gratuity(if any)

Deductions include income tax on salary and allowances along with professional tax. The In-hand salary after deductions and putting 12% in EPF would be around 40300 INR.

That is the final amount you get in your bank account by the end of each month. When you file for ITR, you can claim the taxable amount by showing the necessary proof. 

Note- The above salary calculations are only for the sake of an example. It may vary depending on your salary structure.

Key Takeaways

Studied your salary slip yet? 

Be it your very first job or a 5th switch, understanding your salary structure is very important. Don’t let the illusion of CTC rule you. There’s a lot more to that.

From the above breakdown, you will be able to see how your salary structure works. It will also help you negotiate your salary structure with your employer.

Taxation comes into the picture at almost every subsection of your salary. Income tax rules, even though complicated at times, can come in handy if you know how to benefit from them.

Keep track of your expenses under all the allowances. Maintain a spreadsheet to note down your finances. You can also consider various investment avenues to get more tax benefits. Knowing how to divide your salary into savings, investments, and expenses will help you in the long run.

Get in touch with our advisors to analyze your investment portfolio. Start building wealth for your retirement as early as you can.

You may like to read- 

7 Types of Tax Saving Instruments

Benefits of Investing Early

What is CAS?

Consolidated Account Statement or CAS is an account statement that holds the summary of all your investment transactions. CAS statements give you an overview of your mutual fund investments, SIPs, and other financial instruments held under your Demat account.

The statement fetches all the buy/sell investment transactions associated with your PAN. 

Usually, fund houses and wealth managers send the statement to investors each month. But even if not, you can easily download e-CAS online from platforms like CAMS.

Why Download e-CAS?

1. An e-CAS statement helps you keep track of all your investments and profits earned from it.
2. You can make further investment decisions based on the e-CAS statement. 
3. Even though you can track your investment via an online Demat account, an e-CAS statement keeps you organized and informed.
4. Most importantly, the e-CAS statement helps you identify and file income tax. 

Here is how to quickly download e-CAS online.

Steps to download e-CAS online

You can download e-CAS from various platforms such as CDSL, NSDL, or CAMS.

For the sake of the example, let’s go with CAMS.

CAMS lets you create an account to track each transaction and download statements. But you don’t need to have an account to generate e-CAS.

Step 1- Visit – https://www.camsonline.com/ 

Step 2- Navigate to the ‘MF Investors’ from the header menu to browse the services for the investors.

From the listed services, we are looking for ‘Statements’.

Under Statements, go with CAS-CAMS+KFintech. It will have all your investment transactions. 

Step 3- After selecting CAS-CAMS+KFintech, go ahead and fill in the details.

• You can either go with the summary or the detailed statement. 
• Select the duration for which you want to download the statement. 
• Select the preferred folio listing. 
• Provide your email address and create a password.
• You will need this same password to open the e-CAS PDF delivered to your email ID.

NOTE- You need to provide the email address associated with all your financial and investment transactions.  

The PAN number is optional, but you are free to provide it if you want.

Step 4– Click ‘Submit’.

You will receive the e-CAS pdf to your email ID where you can see all your buy/sell transactions. 

Tips Before Downloading the Statement

• Download monthly statements instead of yearly ones. It will be easy to keep track of each transaction.
• Prefer selecting a detailed report instead of a summary. It will help you plan your future investments. 
• Make sure to use the same email address across all investment platforms.

We hope this was helpful. Reach out to us for any further queries you may have. Get more Personal Finance Tips from our advisors.