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5 Money Questions To Ask Yourself

The pandemic has made us realize how important it is to be prepared to meet a crisis. While we try to make ends meet during this time of uncertainty, we’re constantly left wondering whether we’re financially equipped to fight a situation. 

It’s true that the pandemic has made people take their finances seriously. Knowing where you stand in the financial abyss, you need to be ready for what you are going to be facing in the future. 

There are several different ways one can check their financial health and be ahead of the crisis.  To start with, here are a few questions to ask yourself to see how financially sound you are.

  1. What is your income source and frequency? 

The first question you need to ask yourself is about the money you are earning. It may be your salary, a return on investment or any form of profit earned from your business. All of these are considered as your incomes.  These incomes will determine how much you can spend. You also need to ask yourself how often your investments are giving returns, and how frequently you are getting a salary. It is important to ask this question in order to determine a pattern of income which can help you use the money wisely.

  1. How much do you spend?

While many people spend their income on their needs and wants, one has to ask how much they can spend on a specific goal. You need to plan how you spend your funds so that you have stability even if a sudden expense occurs.  The best way to be safe from such risks is to spend according to a predetermined plan that you have set up for yourself. If you follow the money management rule, it will effectively help you determine your income and make efficient use of it. 

  1. How much debt do you have to pay?

The word debt can cause uneasy feelings and create anxiety. Debt management is an important part of being financially and mentally healthy as too much of a loan can put you under a lot of stress. So check how much you owe and plan to reduce its burden as soon as you can. Remember, being debt free is a great stress reliever and will help you grow financially stronger. 

  1. Do I have funds for emergencies?

The core aspect of a financial plan is putting cash away for emergencies. Uncertainty will leave you with no choice but to drown in debt. To avoid this, you can start saving money for emergencies. You can start small and be consistent. You could also consider insurance for your family, which is a smaller expense. 

  1. Are your risks covered? (Insurance)

Being insured is one of the best ways to be safe from the uncertainty that life brings. Returns may vary for each investment. While being insured is an additional expense from your pocket, it will help you in times of emergencies like pandemics, economic recessions, inflation or any other form of a problem you face with your income stream. 

These are the few crucial questions that will help you know where you stand as far as money management is concerned. It’s important to have the right financial plan to get through circumstances stress-free, and with minimum damage to your lifestyle. Do you think you are financially healthy? Leaving you with this food for thought for the time being. 

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Smash The Patriarchy: Here’s Why Indian Women Are Buying More Homes.

Owning a home is perhaps one of the biggest accomplishments for anyone. Apart from creating an asset under your name and building a safety net for yourself, there are several reasons why it’s important to own a home, especially in today’s times. Interestingly, studies suggest that more and more Indian women are now opening up to buying their own homes, stepping away from the shadows of their fathers and husbands. In fact, owning a home is one of their top preferences when it comes to correctly investing their money. This amazing and welcome change has resulted in home loan providers designing exceptional benefits and opportunities for women. What are they? Read on to find out! 

Lower Interest Rate 

Women enjoy the privilege of paying a lower interest rate on home loans. A home loan is a big deal, and an exception to the interest rate can be a huge support. The interest rate is lower by 0.05 to 0.1%, making it relatively easier to pay the EMI and repay the entire amount within time.  

Lower Stamp Duty Charges

Stamp duty is a compulsory tax that the state government imposes on the property during its sale or transfer. While every state may have a tax rate that varies from each other, status of the property, type of property, usage of the property, location of the property etc. are all interconnected to the stamp duty charges. Majority of the states in India offer an allowance on stamp duty if the property is registered in the name of a woman, whether it is a sole proprietorship or a joint proprietorship. 

The difference in the rates usually scales from 1% to 2%, and this can make an enormous difference in the property price. 

Tax Benefits

Women also enjoy tax benefits on their home loan repayments. 

The maximum tax deduction is Rs 1.5 lakh on the principal and Rs 2 lakh on the interest repayment under section 80C and under Section 24. 

If a husband and wife are co-owners of the property and have different streams of income, the deductions on the home loan tax for the couple would sum up to Rs. 3 Lakhs on the principal amount and Rs. 4 Lakhs on payment of interest under the same. 

Access Large Amounts With Longer Repayment Tenors 

Arranging funds to buy a house is not a piece of cake. It may take years and sometimes, a decade’s savings to build one. But because of schemes like these, women can build their dream house effortlessly. 

One can access home loan amounts right from Rs. 30 Lakh to Rs. 3.5 Crores to build or buy a home. Further, home loans for women are offered for tenures of up to 30 years and till the age of 70. 

Schemes like PMAY (Pradhan Mantri Awas Yojana) 

Under the ‘Housing for All’ scheme, those with an annual income of not more than Rs.18 lakh can apply for it. Giving a higher preference to women, the PMAY makes co – ownership mandatory offering a subsidy to women up to Rs. 2.67 Lakh and this has taken a massive rise in the number of women applying for home loans in India. 

Apart from these, women enjoy numerous profitable add-on offers such as a free holiday, gold coins, vouchers and a lot more that are here to encourage women to step up on the road to women empowerment.

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Things To Know Before Buying A Credit Card

Applying for your first credit card is a huge milestone in your financial journey and can often prove to be a daunting task. Understandably, since there are over a hundred different cards available in the market and very little guidance on how to go about it. 

brown wallet

We believe credit cards are powerful financial tools, if used rationally, that can benefit you in multiple different ways and help build a strong credit history as well. If this is your first time applying for a credit card, let us be your voice of reason and take you through some of the things that you must know before applying for one.

  • Different types of credit cards 

There is a whole list of credit cards that one needs to be aware of before purchase. From beginner level credit cards to travel credit cards, here are some of the credit cards available in India: Basic Credit Cards (given to entry level customers) Secure Credit Cards (for those who have a poor credit history)No Annual Fee Credit Cards (does not levy an annual fee for the usage of the credit card) Low-Interest Credit Cards (those that offer a lower interest rate as compared to the other cards from a similar category) Balance Transfer Credit Cards (low-interest rate for a specified period of time) Rewards Credit Cards (offers some kind of rewards for every rupee you spend with the card) Cashback Credit Cards ( offer a certain percentage of the purchase amount) Travel Credit Cards (offers benefits such as travel insurance, global acceptance, favourable currency conversion rates) Entertainment Credit Cards (provide discounts and offers on entertainment-related spends)Premium Credit Cards (for high income individuals) and much more. 

  • Rate of Interest 

Interest rate is of the main reasons that banks issue credit cards. The interest rate on a credit card is usually higher than that on loans. Credit cards follow the daily compounding interest rate which is based on the Annual Percentage Rate (APR). Based on the type of card you choose you’ll find yourself paying either a fixed or a variable interest rate. 

  • Interest-free period 

An interest-free period is a duration from the date of the transaction to the payment due date, something that is offered by most credit cards. If the full payment is made within this period then there is nothing extra that you have to pay to the bank. However, payment post this interest-free period comes with an applicable interest fee which is usually on the higher side. It’s advisable to make the entire payment within this period to avoid any extra fees. 

  • Fees and charges 

This is probably considered one of the most important elements of a credit card agreement. Fees and charges help you determine how much you will be paying for the card, withdrawing cash from the ATM, or upon failing to make the payments. Some of the important fees to know about : annual fee, late payment fee, over-the-limit fee, cash advance fee, balance transfer fee and foreign transaction fee. These fees again differ based on the card issuer so it is important to have a clear understanding of these before proceeding with the application. 

  • Minimum payment 

As part of the credit card agreement with your bank and the transactions against your card, you will be required to either make the full payment or the minimum payment that has been agreed upon. The minimum payment is calculated against the interest amount with one percent principle or on a certain percentage of your current balance. This calculation differs based on the card issuer and hence it is important to understand how your card issuer is going to calculate it. 

  • Credit limit 

The maximum amount that you are eligible to borrow is known as the credit limit. This credit limit is set by your issuer based on your qualifications and eligibility criteria. Be mindful about not reaching or getting close to the credit limit since it will then affect your credit utilization ratio which in turn can damage your credit score. Credit card issuers generally review your account on a quarterly, half-yearly or annual basis and either increase or decrease your credit limit. 

  • Perks 

A credit card generally brings with it certain rewards like points, cashback offers and other discounts and deals. Most of these perks come as an introductory offer to attract buyers but over time you will end up accumulating points that you can redeem in various forms. Check for the offers that different cards have to offer and analyze which ones are going to be beneficial for you. 

The important things to know do not end with this list but this is the bare minimum that you must know. While selecting a card, you might feel overwhelmed with the different options available but let your spending habits and your real need for a credit card guide you towards choosing the right one for you.  Always remember, everyone’s financial journey is different and what works for someone else might not work for you. 

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15 Frugal Tips To Save A Lot Of Money

A frugal lifestyle is often confused with a life that sacrifices on quality. This is because the term frugal is, more often than not, misconstrued as a negative one. If done the right way, choosing to be frugal can actually add more value to your life. Do you agree? 

The art of frugal living

A lifestyle where you are very intentional with your spending is a frugal lifestyle. It is about prioritizing your money on things that truly matter, and cutting out all the frills that don’t. If you choose to only look at the sacrifices you make, it is bound to get difficult to stay on this path. However, if you look on the bright side, these sacrifices add to larger benefits down the road. 

Why is frugal living a great idea?

The benefits that come with choosing a frugal lifestyle are multifold. 

  • It puts you on the path to financial freedom by accelerating how quickly you achieve your personal financial goals.
  • It allows for a cause-and-effect reality to take hold in terms of finances.
  • You get to decide where you spend your hard-earned money. 

How does one live a frugal lifestyle?

If you’ve tried to lead a frugal lifestyle over the years but have fallen off the wagon, it’s okay. If you are new to this life, then it may seem difficult at first. That is also okay. We’ve been there. We are all for that frugal lifestyle, and over the years we have found tips and tricks that really lower expenses and help us save a lot of money. 

We’ve put together some of our favorite tips for you to save money while living your best life. When we say this, we understand that a frugal lifestyle means different things to different people. We just want to help you live a life that aligns with your goals. 

  1. Start budgeting your finances 

Your first tool towards a frugal lifestyle and your financial success is creating and sticking to a budget. It helps you prioritize things that are important and cut out the ones that are not. There are many tools available to help you plan your budget. You can start by maintaining either a weekly or monthly budget, whatever works for you. 

  1. Take stock of your pantry 

If you ever walk into your pantry and take stock of the food available, you’ll be surprised. In today’s digital world, ordering food at the click of a button has spoiled us rotten. Instead, get into the habit of making meals at home with what is available. The fact that it is healthier than take-out food is an added bonus. Of course, you can indulge in food from your restaurant; you just don’t need to do it four times a week. 

  1. Sell the things you don’t need 

If you look around, there’ll be five things in your direct line of vision that you can do without. Set a day aside, look around the house and put aside things that you have outgrown. With a little bit of effort, this clutter can be cashed through different platforms such as Facebook and eBay, to name a few. 

  1. Start thrifting 

Local thrift stores and online marketplaces can really surprise you with the things on sale and the prices they are available at! Apart from saving up tons of money, you’ll also be saving the planet. A win-win situation, we say. 

  1. Upcycle your wardrobe 

Have you ever considered shopping in your closet? Yes, it’s true. If you look into the deep corners of your closet, you’ll unearth clothes and shoes that are begging for your attention. Sew some patchwork on that jacket or cut your denim and turn them into shorts. You can be fashionable, even on a budget!

  1. Walk or bike whenever you can 

We’re all guilty of taking the car to the nearby grocery shop that is within walking distance. Next time, ditch the car and walk instead. Not only will you save on a lot of petrol money, you’ll also end up burning some calories in the process. 

  1. Workout at home 

A membership at a good gym can really burn a hole in your pocket. Instead, join an online workout class that is relatively cheaper and also lets you work out at ease. Or you can ditch a membership altogether and pull out a video from YouTube instead.

  1. Automate your savings and investments 

It is easy to fall into the habit of overspending when your savings and investments are not automated. Get a financial advisor on board and figure out places where you can invest in and automate them. Also, go through your expenses and set up automatic payments wherever possible. 

  1. Evaluate your subscriptions 

Do you really need subscriptions to six OTT platforms? You’ll be surprised at the amount you pay on an annual basis just to watch one movie from that one platform. Keep the ones that are worth keeping and cancel the rest. 

  1. Get a side gig 

The gig economy is booming in the country and all over the world. Pick up a part-time job near your house or even one that requires you to work from home. There are tons of exciting options available.

  1. Shop in bulk 

You’ll be surprised at the amount you save when you buy certain things like toilet paper, soap, paper napkins, among others, in bulk. The price per unit is low when you purchase large quantities. Make a list of items that you use daily, and next time you go grocery shopping, buy them in bulk and keep them. 

  1. Plan your travels better 

Travelling does not have to be an expensive affair if you plan it well. Try to plan your travels during the ‘off-season’ as everything is relatively cheaper. Ditch the expensive hotels and opt for a beautiful Airbnb instead. Also, avoid the tourist traps and eat where the locals eat, instead. Not only will you save up on cash, but you’ll also get to eat some of the best food!

  1. Make gifts instead of buying 

There is a certain emotion associated with gifts that are handmade instead of store-bought. Gifting during the holiday season can be expensive. You can check out videos on YouTube for some great gift making ideas!

  1. Grow your vegetables 

If you are blessed to have a small open patch in your house where you can grow a vegetable garden, do it! Apart from being fun and inexpensive, there is also a sense of great satisfaction associated with it. 

  1. Ditch the expensive coffee 

We’ve all been there and done that. Try ditching that expensive cup from Starbucks and instead start brewing your coffee at home. There are some top-notch home-grown brands that source the best coffee from all over the country. Your wallet and taste buds will thank you.

As you can see from the tips above, a frugal lifestyle does not ask you to give up your favorite cereal brand or stay at home instead of going on a vacation. Also, don’t cut back on too many things too fast, as it is bound to backfire. It all comes down to the strategy and approach you choose for yourself. If you get addicted to this lifestyle, we completely and happily accept all the blame!