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5 Tips To Optimize Your First Salary

When we first earn our hard-earned salary, our emotions often get the best of us, and we end up spending so much that we’re left with almost nothing, too soon. What’s worse, it might end up as a bad habit and will hurt us in the long run. Relying on well-known baristas every day for coffee, ordering food online might satisfy your urges, but only for a few hours. We know what it’s like to be swayed by our wants so easily, which is why we are sharing these 5 financial tips: 

1. Start Saving Up For Your Retirement- Although you might think that your retirement has ages to come, consider saving up for it NOW. If your company adds a percentage to your retirement savings, then you are lucky, but if they don’t create your own which automatically deducts the amount as soon as your salary comes in. Treat it like you are paying a bill, but the most fun part is- that you are only paying YOURSELF! 

2. Hire a Professional- Creating our own financial goals might be easy, but getting there is difficult, as we need to map very complex financial routes that might be beyond our own bandwidth. That’s where professionals like CAGRfunds come in.  They assess the health of your finances and assign plans or investments that help you get to your goals. Start small with an annual financial check and then build up a relationship! 

3. Accelerate Debt Repayments- Try to pay off your debts as soon as possible. They may be your student loans, credit cards, or any type of personal loan you might have taken. It’s simple- start off with the loans which accrue a high interest, in most cases, they are credit card loans or student loans. Like the retirement option, try automated payments towards these loans so it feels like a monthly bill, so you don’t have to depend on the last moment to scramble over your finances.

4. Invest in a PPF or an ELSS- Under section 80C of the Income Tax Act of 1961, Equity Linked Savings Scheme or ELSS is a tax saving investment wherein by investing in it, you can claim a rebate of up to 1,50,000 and save almost 50,000 a year in taxes! It is the only kind of mutual fund that is eligible for tax benefits under section 80c.   A PPF or a Public Provident Fund is a government-supported retirement saving scheme to help generate small-scale savings towards retirement. It is also a tax-saving investment that helps you build your retirement fund while saving you some money from getting taxed. 

5. Create an Emergency Fund- The pandemic has taught everyone about the dangers of uncertainty and the chaos that it may bring. Any unforeseen circumstance might befall you causing you to incur heavy expenditure. Again, automating your payments towards your emergency funds, and treating it like a bill, helps you to make creating funds easier. 

We hope these 5 easy tips help you forge a path towards your financial goals! Happy saving and investing!

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Here’s Why SIPs Are A Great Idea!

We’re all taught how to dream big from day one. Be it your dream house, owning that Porsche or going on that bucket-list trip, we’ve been encouraged to aspire.
While everyone teaches us to dream big, no one shows us HOW to reach these goals.

On some days, we’re confident of ourselves and our dreams. On other days, we feel like we’re working hard for nothing. How does one stay motivated?

Here’s some food for thought : If investing was taught to us as a subject in school, can you imagine how revolutionary the economy would have been, with individuals who were confident of their money management skills?

Aspects like how to have an analytical mindset, how to take calculated risks, how to invest the right way, what are the financial risks involved, how to have more than one stream of income, how to calculate risks v/s returns and more, would have transformed us from individuals to successful investors, do you agree?

At a time like this when we’re left feeling overwhelmed and confused, what we need is an investment strategy that will see us through on a rainy day. Speaking of which, have you considered SIPs?

What are SIPs? How can they help you achieve your goals? How can they help you stay financially independent? Here’s a quick 101:

What are SIPs?
A systematic Investment Plan is an investment tool through which you can invest in Mutual Funds. While in several other investment tools, the individual has to pay a large sum of money at once, SIPs use a systematic method of investing a fixed sum of money over a period of time.
The time of investment could be monthly, quarterly, semi-annually etc.
This gives us the advantage of making many deposits over time without the burden of investing a lump sum at once.

What are the benefits of investing in SIPs?

1.Compounding.
When you invest in a SIP, you can enjoy a compounding return on your investments. It has substantial practical implications as and when an individual invests in SIPs regularly, the returns they have earned also gets reinvested. Over time this creates a snowball effect which helps an individual get more returns from the investment over a long time. In essence, if you begin investing in SIPs at a young age, the more benefits you can enjoy!

2. Low initial investment.
Through SIPs, you can invest in Mutual Funds with a monthly cost as low as ₹500, making it very affordable while not hampering daily needs. You could also increase the amount of investment if you have a raise in income. Meaning you can start with an amount as low as ₹500 – ₹1000 and then gradually increase the amount of investment through which you can reach your dreams at a faster rate.

3. SIPs are super convenient.
So many of us do not have the time, knowledge and tools required to study the market and do extensive market research. You will have to choose a good fund and let the platform you’ve chosen do its job of automating the payments. It will save a lot of time and effort, making it more convenient.

4. Rupee cost averaging.
When you invest in a SIP, the funds are purchased according to the market rates. It means that you can buy fewer units of the fund when the market is high and buy more units of the fund when the market is low, averaging the cost of the units in the long run. This makes investing steady and helps keep your investment away from market volatility.

Simple tools like SIPs are helping people invest small funds over a long period of time, taking it easy on their bank balances while turning dreams into reality. SIPs will definitely help you achieve your goals making it suitable for your investment needs.

Disclaimer: Mutual Fund investments are subject to market risks. Read all scheme related documents carefully.

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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.