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Blog Article 2022 (2)

How does floating interest on your Home Loan impact your finances?

Your home loan EMI is determined by 2 things - the rate of interest and the tenure of your home loan. Of these 2 factors, the interest rate is determined by the RBI and Banks, tenure is what you can adjust based on your home cost and your EMI affordability.

The first thing to know is that your Home loan interest rate is a floating Interest rate i.e. the interest rate on your home loans would increase and decrease depending on the repo rates set by the GOI. If the interest rate goes down, it will benefit you because you will be paying out a lesser amount of interest. On the other hand, if the interest goes up, then you pay more interest.

In the past 8 years, the interest rate has been on the downward trend making home buying a very lucrative deal for us as the home loan kept getting cheaper. However, in the past 6 months, the interest rate has been raised twice by the RBI. The RBI is increasing the interest rate to curb the rise in inflation. You can read more about it here. 

See the Interest Rate chart here to know the movement of the Interest rate by the GOI.

unnamed (5) (1)

How would increase in interest rate affect a home-buyer’s payout?

The Reserve Bank of India (RBI) raised its key repo rate by 50 bps to 4.9% during its June meeting, after May's surprise 40 bps off-cycle hike, surprising markets had forecast a 40 bps rate hike

Many Investors, who bought houses at the interest rate of 6.75% - 6.95% (at their lowest), will now have a big impact on their EMI. Their Home loan interest rate would increase by at least 1% in the coming months. In fact, if there is a further increase from RBI, your home loan interest rate could also go up to 8%. The interest rate determines your EMI, so where there is an increase in interest rate, your EMI would increase. Many banks are offering that instead of EMI, increase your tenure of the home loan (which sounds more doable as it will not impact the home-buyers cash flows). 

In the example below, we shall explain to you what you should opt for with the increased interest rates.

Increase your EMIs - keeping tenure the same.
Increase your tenure - keeping EMIs the same.

An example: 

House Loan - INR 1 crore

Interest Rate - 7%

Tenure - 25 years

EMI - 70,678

Total Interest payout - 1,12,03,335

Total Payout  - INR 2,12,03,335

 

How your EMI will be affected by an increase in interest rate by 1%

table 1 (3)

In this table, you can observe that with an increase in interest rate, the EMI is also increasing and hence, the total interest payout over your home loan tenure has also increased.

Banks these days instead of raising your EMI will increase the tenure of your loan. Let's understand how that would impact your overall interest payout.

How your increase in tenure can impact your loan payout?

However, many banks are not increasing their EMIs, but increasing the tenure on the home loans. Let's see how that would impact your total cash outflow over the home loan period. 

table 2 (1)

You can observe from the above tables that the total interest payout when you keep the EMI the same is much more than the option of increasing your EMIs.

table 3 (1) (1)

You can learn more about buying a house from our course - Money & Makaan - 

Change in interest rate is not something you can control but is determined by RBI and the banks. The best approach is to be prepared for an increased rate and keep some cash flow free so you are able to afford the rise in EMIs.

Wealth Cafe Advice: 

Remember when the increase in interest rates is beneficial to your banker, they will not call you and tell you how the tenure increase instead of EMI increase is better for them than for you. 

The best approach for you would be to understand the difference between the 2 approaches and their impact on your cash flow. Connect with your banker and ask them to share a calculation, loan amortisation sheet, and understand your numbers. You can reach out to us at iplan@wealthcafe.in to know more about it.  

Blog Article 2022 (2)

Should You Buy A House Using EPF?

Buying a house is one of the biggest/most expensive purchases for most of us.

You may lack the funds required to make a purchase even when property prices remain stable or fall. As we all say one has to strip naked financially in order to buy a house and in such a situation the thought of breaking your EPF investment may come across your mind.

But is funding your house using EPF a good idea? Let's discuss it

Firstly, let us understand the withdrawal rules of EPF

You are allowed to withdraw EPF accumulations to make down payments to buy a house or for paying EMIs of a home loan. Let us understand it individually:

For Purchasing or constructing a New House-

  • In accordance with Section 68B of The Employees’ Provident Funds Scheme, 1952 (‘EPF Scheme’), you can withdraw: 24 months of basic salary plus dearness allowance (DA) or actual cost of the plot - whichever is lower
  • For this, you should contribute in your EPF account for at least five years.
  • The minimum balance in the EPF should be INR 20,000, either individually, or together with your spouse, if he/she is also a member of EPFO.
  • The house in question should be in your name or jointly with your spouse.
  • You would need a letter of authorization from your employer for PF withdrawal if you have not verified your Aadhar Card.

For Repaying Home Loan-

  • For the purpose of repaying the outstanding home loan, the PF member is allowed to withdraw up to 90% of the corpus if the house is registered in his or her name or held jointly.
  • For this, you should have at least three years of service after opening the EPF account.
  • If PF/EPF withdrawal is done before 5 years of opening the account, then the amount is taxable.

The provident fund scheme allows you to withdraw funds, only up to 36 months of your basic salary plus DA  for any of the above purposes. Also, you can withdraw from it only once in your lifetime.

Does breaking EPF for buying a house make sense from your entire financial planning perspective?

EPF is an opportunity to accumulate money for the post-retirement period. You keep contributing a small fraction of your salary to the EPF and your employer matches your contribution. As the salary increases, the contributions do go up. That makes a large corpus in your hand for your retirement, provided you do not withdraw it for any other purpose. You let the magic of compounding work for you by investing regularly and consistently in your EPF corpus.

For example, an EPF contribution of 16,000 per month from the age of 25 - increasing at 10% per annum would become a corpus of INR 3.27 crore on retirement. Now, if you withdraw 90% of the corpus at 30 i.e. INR 17.1 lakhs amount. At 60, your corpus will only be INR 2.29 crore.

You are reducing your actual retirement corpus by INR 98 lakhs approx.

Hence, you should not withdraw your investment from EPF before its maturity as this could jeopardize your retirement by exposing you to the risk of leaving no funds/reduced funds for your retired life. Remember, no one will give you a loan for your retirement but for a home, you can manage.

We do understand that a house is a necessity and in the Indian context ‘owned house’ is a social and psychological need for many of us. But, short-term thinking’ focused on immediate gratification must be avoided at any cost.

How to arrange for the downpayment of your house?

It is better to make a plan for home buying. Start saving money to accumulate the down payment amount over three to five years. If the home prices go up or your investments yield less than expected, you may want to delay the home buying by a year or two. Avail of the home loan after you make the down payment but do not touch your EPF money. That is your retirement security.

Wealth Cafe  Advice

Do not break your one goal to achieve another. Especially when it is the retirement goal. Do not break your EPF for home buying, unless you have other means to secure your retirement. Plan ahead and plan properly.

Check our course - Money & Makaan - to learn to plan for home buying

Talk to your mother about Money

My mother (and I am sure yours too)  has always been a support to me no matter what - whether it is my choice of clothes, my career decisions, relationships I should or should not be in, she has always been by my side. It is said a mother-child relationship is the most unconditional relationship ever.

This mother’s day, gift your mother (the love and support) she has given you in return by making her financially independent. She is the reason you can do whatever you want to in the world. Be her reason to be financially confident and be adaptable to what comes next. Whether your mother understands money, finances, English or just banking in general or not, this blog is to guide you on what kind of conversations & learnings you can have with your mother. 

As a step 1 - Understand where your mother is financially today and then guide her on what more she can learn to be financially secure and confident. Let's get started.

What are the financial things you can talk to your mother about?

1. Keep her informed about what you do

Before you tell her what she should do, it is important to tell her what you are currently doing. Discuss your job/work with her, explain to her your work profile, your salary, where you invest and why. We tend to discuss our expenses with our mother because she has some great answers on how to save better. Take it to the next step - discuss your investments with her. 


2. Where the money is Invested

Keep your mothers informed. How she knows about everyone’s health issues, food preferences and other things. Inform her about financial things as well. Whoever may be the decision-maker (you or your father or grandfather), get her involved in financial discussions of the family. Tell her where the family money is invested and how she can access it when and if the time arises.


3. Basics of banking 

One of the first things to make your mother confident about money is to guide her with banking work. Ask her to go to the bank and deposit cheques, visit the branch for any work that may need bank help, update the passbooks frequently and withdraw cash from the ATMs.

Explain to her how a credit card works and how she can make the best use of it, it will encourage her to use it to spend on her shopping and earn points too. You can buy things for her from the reward points earned on the card. 

These may seem very simple for us but for her, it means freedom and access to money without asking us or our father constantly. 


4. Guide her to be digitally smart

Gpay, paytm, phone pe is the way to go ahead and it only makes sense that your mom can shop by paying via gpay. I mean even our next-door sabji wala is now taking money on UPI payment apps. It may take time to explain to her how to do this, she may be scared, confused and ask you the same thing again and again. Do not lose hope and patience, explain to her slowly and trust me she would get it.

I now get shagun on gpay from my mom for festivals, so it is a win-win for everyone.

Where your mom has gotten the basics right, you can start by explaining her mobile banking and online shopping. Again 2 very important life skills are needed in today's time. Ask her to start with small ticket things and then move ahead. It will give her confidence and eventually reduce the calls to you about how to send money to someone, or buy a new dabba for the kitchen. She will do it all herself. 


5. Make her aware of financial fraud but don't scare her.

The reason our moms are not going and doing everything online is that financial frauds are scary and very much real. She must be knowing someone who has been a part of it and does not want to meddle with family’s or her money. Take it as your job to build her trust in the system, teach her how to do it right and never to do it around strangers.  


Most importantly make her feel secure that if anything does happen, you are there to take care of things.  One line will change her entire approach towards this process of learning UPI and more and she will do it overnight. 


6. Insurance - check if she has one and she is informed about others

Continuing from our earlier discussions on keeping her informed about the various financial situation of the family. You must inform her about insurance as well. Keep her informed about insurance you have/other members of the family have and where are the papers for the same.


Check if she is properly ensured (health insurance), if need be get a top-up for the same and also tell her where the documents are and how to access them. For example, my mother books her annual free health check-up (which is provided to her by her health insurance) by herself now and gets a check-up done. One thing she knows is that it is important and FREE. So she never misses it. Give your mother the incentive to learn and see her fly. 


Wealth Cafe Advice:

Do remember that it will take time, patience and a lot of arguments (I must have left it thrice and then gone back to explain her again), the end result is beautiful and it will make your mother confident and independent. Yes, loving your mom, cooking for her that one day or handholding her with different things does make us all happy. Along with this, work towards making her independent too.  The confidence she would feel when she goes to the bank or transfers that money to you cannot be compared to the best compliment ever given her.


Our mother may lack behind in investments, but you all may agree she is best at saving and budgeting. 

We need to motivate her and tell her how good she is managing her monthly budget, how good is she at bargaining and finding the best deal while buying groceries or shopping, and how well she has managed to teach herself to spend wisely. Just take it to the next level and teach her on how to do it all online and invest too.

You can enrol her to our Be a Fe-Money-ist Webinar that we are conducting this Saturday, i.e on 7th May - for more details - click here.

If you wish to learn more about the various asset classes you can learn more about it here. Use code SAVE20 for 20% off.

Blog Article 2022 (4)

Financial planning: Steps to take when you have a Newborn

It’s no secret that pregnancy comes with a long to-do list. There are the obvious tasks (setting up a nursery and baby proofing your home), and the less so (applying for baby’s aadhar card and opening a bank account). Things might get difficult to manage when the baby arrives but with a little bit of planning, you can get a head start on these crucial to-dos to save you time (and stress) once the baby arrives. 

So here is your handy guide to getting the baby's important documents – from where you can get them, to how to go about applying for it, and everything in between! But before you even plan to make any of the following documents, it is important to name your child. Always remember, to mention your child's name without any spelling errors - even a letter change or an extra space can make a huge difference.

 

1. Birth Certificate

Let’s start with the very first document you need- Baby’s Birth certificate. This is a vital and mandatory document that you would have to prepare for your child within the first 21 days of the child’s birth, by filling up the form prescribed by the Registrar. It contains details such as time and date of birth, location, gender and parents’ names. Most Birth Certificates today contain the name of the child unlike in earlier times, which makes it a valid Proof of Identity. It usually takes up to seven days for the authorities to issue a birth certificate. However, if due to some reason, you fail to register your child within the stipulated time, you will have to pay a late fee. 

Documents needed: Self-attested declaration stating the purpose to be submitted to the Corporation along with the form issued by the hospital. 

 

2. Aadhar Card 

Starting from gas subsidies to working as valid residence proof, the Aadhar Card has numerous benefits and it only takes a little time and effort to make one for your child. 

Getting an Aadhar card for a newborn involves no biometrics. You just need to book an appointment online by logging in to the official UIDAI website. Your child will be processed on the basis of demographic information and facial photographs linked with your UID. However, you need to update their biometrics of ten fingers, iris and facial photographs, when they turn 5 and 15.

Documents needed:

  • Child’s Birth certificate
  • Aadhar Card details of either/both parents of the child

Note: Original copies for both these documents will be required for the verification process.

 

3. Bank Account 

Opening a bank account is one of the most important steps to undertake. Once you have a kid you will start getting gifts on their birthday as well as at various festivals. Many times these gifts include cash which you tend to spend here and there. Instead, you can deposit all these gifts in cash in their savings account behalf of them.

Documents required to open a bank account for a minor:

  • Child’s Birth certificate
  • KYC documents of the parents/guardian.
  • Child’s Aadhaar card.
  • Specimen signature of a guardian. The minor's specimen signature if he/she is 10 years old or above.

 

4. Pan Card (optional)

Many people face the question - of whether a minor can apply for a PAN Card as it acts as an important identity proof. The answer is yes, it is possible and the procedure for applying it is a simple and streamlined one. You need to submit an application on the official website of NSDL. Upon submitting the application, you will get a receipt number using which you can track the PAN card application of your ward. Usually, the PAN card reaches your given address within 15 days of successful verification. 

Documents needed:

  • Child’s Certificate of Birth
  • Child’s Aadhaar card 
  • Child’s Photo
  • ID and address proof of the parents

 

5. Passport (Optional)

A valid Indian passport holds a lot of importance and is considered an accepted Proof of Identity and Proof of Address for procuring various other documents and even for school admission procedures. Thanks to simplified computerised procedures, getting a passport for your child is no longer a hurdle. 

You can book an online appointment at www.passportindia.gov.in and after booking an appointment on the website, you can reach the PSK (Passport Service Kendra) with your child at the allotted time slot to avoid unnecessary waiting.

Documents needed:

  • Child’s Certificate of Birth
  • Child’s Aadhar Card
  • Filled and signed Annexure H which can be procured from the Passport Seva Kendra website.
  • Identification photograph of the child against a white or light-coloured background.
  • Arrangement receipt
  • Marriage certificate if the spouse's name has not been endorsed on a parent's Passport

 

Now that all the documents are in place you need to start planning for their investments. In case you have a girl child you can open a Sukanya Samriddhi Account.

We hope this was useful for you. In case of any queries, you can reach out to us at iplan@wealthcafe.in

    Get your weekly dose of Money Masala from us.


    How is inflation affecting our everyday lives?

    Inflation can impact our finances in a number of ways – from the cost of our weekly shop to the value of our long-term savings – but what exactly does it mean?

    Inflation might be something that not many people understand. Yet, we all experience it and feel its effects. When you head to the store expecting to spend a budgeted amount of money on something, only to spend a lot more, you’ve experienced inflation. Of course, when a price rises on a product it’s not always due to inflation. Yet, inflation still affects your cost of living by increasing the cost of goods and services.

    This is why it’s so important to consider inflation when planning for the future, even if the future is as soon as next year. Especially when planning for retirement, you need to ask yourself what you want as your standard of living because inflation directly affects your lifestyle.

    Therefore, it’s important to understand how inflation works, as well as the effects it could have on your financial planning.

     

    What is Inflation? How does it personally affects you?

    Inflation is often referred to as a “measure of the increase in the price of goods and services over time”.

    Yes, it affects everyone. Yet, it affects everyone very differently. Your lifestyle is based on your income and your expenses. Sometimes, people who have a high standard of living but not a high enough income end up borrowing money to make up the difference.

    Inflation not only affects the cost of living – things such as transport, electricity, and food – but it also impacts interest rates on savings accounts, the performance of companies, and in turn, share prices.

    When inflation rises, borrowing money becomes very expensive. This means either people take out fewer loans or they’re unable to spend less money because it’s going towards debt payments. This reflects a reduction in the purchasing power of your money. In other words, this impacts your ‘buying power, as you’re now able to buy less with your money.

    For those people whose standard of living matches their income, inflation can be both a positive and a negative. Usually, when inflation rises, your income also rises as there are adjustments based on the cost of living. However, even with an increased income, expenses also rise. For those on a fixed income – like retirees – inflation can greatly affect their standard of living.

     

    Let me give you a few examples of where we were to where we are now when it comes to our spending habits or lifestyle expenses.

     

    Movie tickets: From 1975 to 2015

    Watching the latest flick, on opening day for just 3 rupees. Madness. Of course, while there are places where you can still get tickets for a tenner (DDLJ in Maratha Mandir), those places are few and far between.

     

    Coca-Cola: From 1965 to 2015

    This was before Coca-Cola was kicked out of the country in 1973. And here we thought a small Coke for 5 rupees was a big deal.

     

    Amul Butter 500 gms: From 1970 to 2015

    Guess those really were "butter" times, eh?

     

    Is Inflation bad for everyone?

    Inflation is perceived differently by everyone depending upon the kind of assets they possess. For someone with investments in real estate or stocked commodities, inflation means that the prices of their assets are set for a hike. Those who possess cash may be adversely affected by inflation as the value of their cash erodes. A higher rate of inflation can make repaying loans easier because they can end up paying back less money if the interest rate is lower than the rate of inflation.

    Therefore, Inflation influences all aspects of life. You’re going to have to navigate a variety of risks now and in the years ahead, no matter which direction inflation swings. Since everybody relies on goods and services in one way or another, inflation is felt by everybody – either negatively or positively. The best thing to do is to plan for it. If you are saving for the future, pay attention to inflation.

    Blog Article 2022 (2)

    Financial Planning for Siblings

    “Blood is thicker than water” we have all heard this growing up, in fact, experienced it as well with our siblings. Along with this, we have also heard stories in our families or otherwise where siblings ditched each other for ancestral property, did not pay back the loan or diss one another for having more money. Yes, Money is great when you start as you celebrate together, shop together and enjoy everything together but it could also turn into something very complicated. 

    Money discussions between siblings may not be the most common dinner conversation but it is a good practice to take some time out and start talking about money before things get sour. Here we are sharing our insights on how and what you can talk about: 

    WHERE YOU LIVE TOGETHER : 

    Money is obviously an important factor when you live together as there will be some shared expenses between you two. In some families, parents take care of expenses and there this might not be a major discussion. But as the year's pass, the responsibility would eventually fall on the children and it is best to be prepared for that discussion or maybe have it in advance. Usually, the elder sibling takes care of the family expenses (especially where there is a brother-sister equation). However, there may come a point where they would have more responsibility or may be strapped for cash or want to splurge on themselves and then it could end up getting ugly. Instead have a discussion and set certain things right:

    1. Talk about who will take care of what expenses. How will you split the bills?
    2. The person earning more can contribute higher but the other one should also contribute some money so there is parity.
    3. Include the other in your financial plans where you are planning to help the other with their goals like marriage, higher education or setting up a business. 

    WHERE YOU LIVE SEPARATELY:

    Money is not too much of a problem when you live on your own and both are taking care of their individual needs. Over the years though you could have some shared responsibilities like your parents and their retirement. 

    1. Understand from your parents how financially prepared they are for their own health concerns and retirement so you both know what and how much you need to take care of in future. 
    2. Decide how you will both(all) contribute and take care of the expenses of your parents.
    3. Where one sibling wishes to splurge on parents any financial need, the other should be accommodative and not jealous of the same. Have a talk!

    WHERE YOU HAVE AN INHERITANCE COMING:

    We could write pages and stories on what all can go wrong with inheritance but we are expecting better of our wealth cafe investors. Do not get carried away by greed to own everything that your parents do but understand what they wish for you and your siblings. 

    1. Have a discussion with your parents, and ask them to have a will in place so there is no fight tomorrow. 
    2. Talk to each other as well, if you feel you are comparatively better off than your sibling, let them have a bigger chunk of the inheritance.

    Remember that you are siblings before money. Do not lose your brother/sister for some money that may or may not come to you. Develop some money values between yourselves

    1. Talk and communicate with each other.
    2. Be honest. Contribute where you can.
    3. Do not take undue advantage of the one with more money or otherwise.
    4. Ask your parents to be a part of this discussion.
    5. Where you have sisters ensure she is included in discussions and financially aware of things the family is doing.
    6. When you give loans to each other, have proper documentation in place so you do not have a fight regarding it in future. 

    We have all seen situations where one brother defies another for a better inheritance or money, we are hoping that the coming generation will be better off. Money can be a major cause of families breaking - up. Hence, the best way to ensure that does not happen is to talk to each other. 

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      How are women behaviourally better equipped to make financial decisions?

      Many of my friends painstakingly plan their careers, write out where they see themselves in 5, 10, 20 years, and consider themselves independent-minded feminists. Yet the care and planning they put into virtually every part of their lives don’t always extend to their money — especially their investments.

      Managing money is a subject that isn’t taught at any level in school or college. On top of that, traditionally women are rarely asked to take up managing the finances of a family as a first choice compared to their men counterparts. This has resulted in the lack of confidence when women are put in a position where they have to make decisions about their money.

      Studies however show that, when they do, women are more successful at making money decisions. As per Fidelity's study in 2021 on Women and Investing, self-directed retail investors who are female consistently outperform their male counterparts by an average of 0.4%, or 40 basis points, every year. here are many reasons why women are behaviourally better equipped than men:

      1. Women are great savers

      We have known all our life that we are fantastic when it comes to budgeting and saving. Demonetisation in 2016 was a reminder of this, where many home-makers came out to deposit the cash they had saved over many many years. The traditional concept of putting aside money in a ‘gullack’ can easily be adopted using today’s technology to get the desired savings.

      2. Women can make smarter decisions under hysteria

      Another stereotype is that women are very sensitive and emotional and yes maybe we are but that makes us great leaders as we can connect with everyone we meet and work with. In fact, whenever the family faces any financial, emotional or other challenges, the women of the house become the pillars.

      Women can and have kept their emotions aside under distressing situations and taken more reasonable decisions. That is a skill set that comes in very handy in investing, where the markets go swinging and we use this skill set to stay put to logic and basis to the smarter decision required at the moment (keeping all points/statistics and people in mind).

      3. Women research for the best options

      Whether shopping or investing, we do not shy away from research, effort, and putting more time to find something that best suits our needs and budgets. Because we do not make hasty decisions (most of the time), we avoid most of the bad investments including the many Ponzi schemes. We like to buy everything after checking the labels, options, pricing, and our needs. We could and should do the exact same thing when it comes to picking our investments.

      4. Women are great planners and can think/behave long term

      Women tend to see the longer-term picture, and can often look beyond short-term problems. Whether relationships or investing, we know things take time to reach their optimum and are comfortable with waiting. Women have the patience that is required to build long-term wealth and make equity investments successful.

      We have got the right skill sets that are required to invest and create wealth. The only thing we have to do now is: 

      1. Start now and start early 2. Make mistakes and learn from them 3. Do not shy away from asking for help 4. Learn more, read more, and educate yourself

      We have all come a long way from only investing in gold and cash to exploring mutual funds and stocks today, but we still have a long way to go to take charge of our money. Let's start doing that from today.

        Get your weekly dose of Money Masala from us.


        How can Men help Women take charge of their finances

        A lot has been said and written on the fact that women must take control of their finances and we, at Wealth Cafe, strongly believe that.  Being Financially independent gives you the real power to make your own choices and take control of your life.

        But then, why are women not managing their money on their own?

        We know that women are great savers, but when it comes to making a decision to invest the money they find themselves short on confidence. This is because finance has never been the first choice of role for women. They have never been part of money discussions at home or socially resulting in their lack of interest and hence the underconfidence.

        Growing up, I personally remember being told to make the perfect chapatis but discussions about decreasing interest rates in the 1990s were reserved for my male cousins. Well, today, I can’t comment on my chapati-making skills but I can definitely explain everything about interest rates. Qualification aside, I am financially aware because of my upbringing where my father discussed money with me in our daily conversations. 

        An educated man is one person. An educated woman is an educated family. And this applies to money education as well. 

        So how can men change these years of social conditioning and empower the women in their lives to handle money better?. 

        Let me answer this by looking at the various relationships around me:

        Father- Daughter

        I remember I was 14 when my father was driving me back from school and telling me that I am old enough now and I should know all about the investments he had made. For a teenager who had just entered her 10th grade and was worrying about getting her maths right, this conversation seemed pretty out of context. He showed me this red book in which he kept all the records (it was 2005) and also explained to me what insurances he had and whom to reach out to. This was the beginning of my financial journey which set the foundation of what I am writing here today. Here are three ways you can start talking to your daughters about money: 

        • Once a week, over dinner, discuss your work and your investments with her. 
        • At any age, as early as 5 years, open a bank account in her name and teach her how to use an ATM or debit card.
        • Talk and support other women in your life, she will learn what she sees.

        Like any habit, she will learn by watching you. Expose her to good money habits so that she gets a strong foundation early in life.

        Son-Mother

        The relationship between a son and mother is very beautiful and unconditional with mothers giving it all taking care of their sons. As a son, you can reciprocate that by equipping her with the basic survival financial skills.   Here are some starting ideas:

        • Sit with your mother and explain to her how banking transactions work. Show her how to use the mobile app and make her do it on her own. Watch. Be patient. Repeat.
        • Educate her about the basic frauds and how she should be careful about the PINs, OTPs, and cards. She needs to learn to be careful rather than avoid using technology completely. 
        • Transfer some funds to her account each month, and let her use the money as she pleases, no questions asked. She will begin to feel financially free. No one deserves it more. 
        • Make some investments in her name and show her the statements for the investments. Let her feel proud of what she owns and give her a regular update on the value of her investments. 

        By equipping her with the basic skills, you are doing a favour to yourself as you have another person whom you can speak about money, before making decisions. Every now and then, I get INR 500 on Gpay as ‘nek’ / ’ tyohaar ka shagun’ from my mother and a cute WhatsApp message saying - “maine bhej diye paise” (I have sent the money). It's a small thing, but a huge step in blurring the distances between us.

        Husband- Wife

        3

        With marriage, your lives get entwined together, more so financially.  Whether working or not, your wife can play a critical role in easing your financial life. So some of the things you can do to support your wife are: 

        • Sit together and set your future goals and how you both can save and invest to achieve these goals. Having common goals results in a smoother life. 
        • Discuss your bank accounts, investments, and insurances you have. Ensure she is a part of your meetings with your Chartered Accountant, your Financial advisors, and your Insurance agents.
        • Especially when your wife is a homemaker, encourage her to do more than just manage the expenses. For example, let her manage the credit cards payments or track the insurance premiums due and actually make the payments.

        Be patient if all of this is new to her. In case you ever face an emergency, she will be the person nearest to you and in the best position to make a decision. A financially aware decision can make a lot of difference.   

        Brother- Sister

        Siblings have a cute love and hate relationship. I do not have a brother so I was spared of all the crickets and bashing as a child. Apart from the fun, as a brother, you can be her stepping stone to develop the interest and knowledge in matters relating to money. Three things that you can start with:

        • On celebrations, gift her financial instruments like stocks, mutual funds, SGBs instead of cash.
        • If you are part of a  family business, you can encourage her to be more involved, take her side, share her insights with your family.
        • Be more proactive and push her to take care of her own finances.

        Wealth Cafe Advice

        You can be a ‘real man’ by taking these small steps in making the women in your life financially aware and self-dependent. Talk to the women in your life as an equal, as your friend, keeping aside the attitude of ‘know it all. Remember that as men, money is taught to you at every step but as women, we have to take the extra steps to learn about it. 

        Be a part of our support system.

        Pradhan Mantri Jan Arogya Yojana (PMJAY)

        Pradhan Mantri Jan Arogya Yojana(PM-JAY) also known as Ayushman Bharat Yojana is a pioneering initiative of Prime Minister Modi to ensure that poor and vulnerable populations are provided health cover. This initiative is part of the Government’s vision to ensure that its citizens – especially the poor and vulnerable groups have universal access to good quality hospital services without anyone having to face financial hardship as a consequence of using health services.

        How does it work?

        The Ayushman Bharat Yojana scheme offers health insurance cover to beneficiaries without any premium cost, treatment cost during and after the hospitalization. Ayushman Bharat scheme covers both pre and post-hospitalization expenses in addition to the in-patient charges.

        And all the impaneled hospitals under PMJAY Scheme would have appointed Ayushman Mitra's, who will aid the patient by coordinating with the hospital’s beneficiary in order to cut the expenses. You will find these Ayushman Mitra at their help desk where they will be verifying the eligibility criteria, documents, and the enrolment process. They provide letters to all the beneficiaries with respective QR codes.

        Furthermore, this QR code is scanned and verified for authentication to check the eligibility for people to avail Ayushman Bharat Yojana benefits.

        And the best part about the Ayushman Bharat scheme is that it offers coverage across PAN India and offers cashless hospitalization benefits to the enrolled families in both public and private hospitals.

        What is Covered under Pradhan Mantri Jan Arogya Yojana?

        PMJAY covers the following expenses during the treatment:

        • Provides coverage for medical examination, treatment, and consultation fee
        • Pre-hospitalization expenses are covered 
        • Post-hospitalization expenses are covered for 15 days
        • The policy also covers the cost of medicine and medical consumables
        • Hospital accommodation charges are also covered
        • Non-intensive and ICU services
        • The expenses incurred on the Diagnostic procedures are also covered
        • Medical implantation services are covered where required
        • Expenses incurred on complications arising during the medical treatment
        • Food services

        List of Critical Diseases covered under PM Jan Arogya Yojana (PMJAY)

        PMJAY offers nearly 1,350 medical packages at any of the private network hospitals and all the public hospitals. Below are some of the critical illnesses that Pradhan Mantri Jan Arogya Yojana covers:

        • Carotid angioplasty with stent
        • Prostate cancer
        • Coronary artery bypass grafting
        • Skull base surgery
        • Pulmonary valve surgery
        • Double valve replacement surgery
        • Anterior spine fixation
        • Tissue expander for disfigurement following burns

        How to apply online?

        Here is a step by step guide on how you can apply for Pradhan Mantri Jan Arogya Yojana

        Step 1: Visit the official website, mera.pmjay.gov.in.

        Step 2: Now you have to log on to the government website.

        Step 3: On the homepage enter your mobile number.

        Step 4: Just below that you will see the captcha, enter the captcha in the empty box.

        Step 5: After that click on Generate OTP option.

        Step 6: An OTP number will be sent to your mobile, by which you can go to the website and verify.

        Complete the necessary details to get the most benefits out of this scheme. So, these were some initial steps you need to follow for Pradhan Mantri Jan Arogya Yojana registration.

        Documents Required to Apply For Ayushman Bharat Yojana Scheme

        • Age & Identity Proof (Aadhaar Card/PAN Card)
        • Contact details (mobile, address, email)
        • Caste certificate
        • Income certificate (maximum annual income to be only up to Rs. 5 lakh a year)
        • Document proof of the current status of the family to be covered (Joint or nuclear)

        Note: After your name is registered on the Pradhan Mantri Jan Arogya Yojana(PM-JAY) website, with the help of your ration card or mobile number, you can know that you are not getting the benefit of this scheme.

        How to Check your Name in Ayushman Bharat Yojana Scheme List?

        There are various methods to check your name in the PM Jan Arogya Yojana -PMJAY beneficiary list. Listed below are some of the ways that you can try:

        • Online Method- Ayushman Bharat online list can be checked by the beneficiaries. All you need to do is visit the official online site of the National Health Authority for Ayushman Bharat Yojana.
        • Common Service Centres (CSC)- If you are a beneficiary of Ayushman Yojna you can also visit the nearest Common Service Centres. If it is not possible to do so you can also visit any of the impaneled hospitals to collect the information form. You can check the Ayushman Bharat hospital list on their site or in your policy documents.
        • Contact their Helpline No.- You can call on any of the government of India provided helpline numbers (e.g. 1800111565) to contact their customer care and seek the information about PMJAY Scheme, Ayushman card/e-card, Ayushman card apply, Ayushman card download, and even Ayushman Bharat Scheme registration.

        If your name is there on the list, then only you will get the Ayushman Bharat Card.

        How to Download your Pradhan Mantri Jan Arogya Yojana Card Online?

        It is important to apply for the Ayushman card as it consists of a dedicated family identification number. AB-NHPM is provided to every beneficiary household. Below are the steps that you can follow to apply or download your Ayushman card online-

        • Firstly, visit Ayushman Bharat Yojana official website - https://pmjay.gov.in/
        • Now login with your email id and generate a password
        • Enter your Aadhaar number to proceed further
        • Click on the approved beneficiary option
        • It will be redirected to their help center
        • Now enter your password in CSC and the pin number
        • It will be redirected to the home page
        • You will see the download option form where you can download your Ayushman Bharat golden card

        Wealth Cafe Advice

        It is good to stay updated about this scheme where you or your family are eligible and could be a part of the scheme. As per the terms, you cannot apply for it on your own. Let's wait and see how it works out and soon most of the people would get covered under it. Until then apply for the other government schemes that are available to you. 

        1. Atal Pension Yojana
        2. Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)
        3. Sukanya Samriddhi Yojana
        4. Pradhan Mantri Shram Yogi Maan-Dhan

         

        Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

        A large portion of India’s population (80%) is without insurance of any kind i.e health, accident, or life. Therefore in the year 2015, the Finance Minister announced PMJJBY along with 2 other schemes in his budget speech.

        Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) is a life insurance scheme in India backed by the Government. The life insurance scheme is valid for one year and is renewable from year to year, offering coverage in case of sudden death.

        How does the scheme work?

        The scheme is applicable for a period of one year. The scheme will be offered by the LIC and all insurers who are willing to join the scheme. Bank will be the master policyholder and will execute the claim and issue the scheme on the insurance company’s behalf.

        This cover is only for death and hence the benefit will accrue to the nominee on death of the policyholder. Therefore, it covers morality and no investment component. 

        The current risk period is from the 1st of June to the 31st of May. . The same will be renewable yearly.  Delayed enrolment for prospective cover is possible with payment of pro-rata premium as described below;

        Simply put the premium amount that you have to pay will depend upon in which quarter you enroll for the scheme. Where you enroll in:

        • June, July & August: Annual Premium of INR 330 is payable
        • September, October & November: Annual Premium of INR 258 is payable
        • December, January & February: Annual Premium of INR 172 is payable
        • March, April & May: Annual Premium of INR 86 is payable

        A Lien period of 45 days shall be applicable from the date of enrolment. However, deaths due to accidents will be exempt from the lien clause, the Reserve Bank of India said in a note.

        The cover shall be for a one-year period stretching from 1st June to 31st May for which the option to join/pay by auto-debit from the designated individual bank / Post office account on the prescribed forms will be required to be given by 31st May of every year. Delayed enrollment for prospective cover is possible with payment of a pro-rata premium as laid down in the above parameter. 

        There is a waiting period of 30 days in the insurance policy when you first apply for it, which means, If you are enrolling for the first time on or after 1st June 2021, the insurance cover shall not be available for death (other than due to an accident) occurring during the first 30 days from the date of enrolment into the scheme (lien period) and in case of death (other than due to accident) during lien period, no claim would be admissible. 

        If you exit the scheme at any point you may rejoin the scheme in future years. 

        In future years, new entrants into the eligible category or currently eligible individuals who did not join earlier or discontinued their subscription shall be able to join while the scheme is continuing, subject to the 30 days lien period described above.

        Coverage

        The total death benefit provided is INR 2 Lakhs. In case of death of the insured, the nominee can claim the amount, which would be tax-free. The claim process is also simple and hassle-free. 

        Eligibility

        To avail of benefits, you must fulfill the below requirements:

        1. Must be a citizen of India.
        2. Must be between the age of 18-50
        3. Must have a bank account/post office account linked with your Aadhar
        4. Must have a valid mobile number

        Note: The PMJJBY may be terminated if:

        • An insured person crosses the age of 55 years
        • Closure of accounts with the Bank/ Post office or insufficiency of balance to keep the insurance in force.

         

        Pradhan Mantri Suraksha Bima Yojan (PMSBY)

        Pradhan Mantri Suraksha Bima Yojana offers a renewable one-year accidental death and disability cover of Rs 2 lakh at Rs 12 premium every year. You will get Rs 1 lakh in case of partial permanent disability.

        The entry age of the scheme ranges from a minimum of 18 to a maximum of 70 years old.

        How to apply?

        You can get PMJJBY as well as PMSBY via LIC or any other life insurance company in India. Also, many banks have the facility for PMJJBY & PMSBY at their branches. 

        The enrollment process is quite simple:

        1. Download the application form from jansuraksha.gov.in/FORMS.aspx 
        2. Submit the duly filled form with your bank
        3. Submit the necessary documents
        4. Upon verification, you will be successfully registered

        Most banks also offer an SMS-based enrollment process.  Check with your banks for the details on the same and proceed with the application. You can also apply for it from your bank's official website.

        How to get the benefit? 

        1. Nominee to approach the bank where the subscriber opened the scheme with a 'savings bank account' along with the death certificate of the member.
        2. Nominee to collect claim form, and discharge receipt from the bank or any designated source like insurance company branch, hospital, etc. including from designated website
        3. After that, the nominee will have to submit the filled claim form and the discharge receipt, along with the death certificate with a photocopy (Xerox copy) of the canceled cheque of the nominee's bank account or the subscriber's PMJJBY linked bank account. 

        Then the bank will start the procedure of insurance claim. The bank is expected to process it within 30 days to forward the completed claim form to the insurance company. 

        The union government has incorporated all the insurance-related information on this website - www.jansuraksha.gov.in

        Wealth Cafe Advice:

        Let us take an example of a regular life insurance scheme vs PMJJY and understand its benefits in a better way:

        RegularPMJJY
        Current Age2727
        Years of contribution until age  552828
        CoverINR 5,00,000INR 2,00,000
        Annual ContributionINR 5000INR 330
        Total contributionINR 1,40,000INR 9,240
        Annualized Return5%12%

         

        Please note that this to give you an idea that INR 2 lakhs may not seem enough for your insurance needs but the scheme is a very good scheme in perspective of the benefits it is providing to a larger section of the society who do not have any access to any insurance currently.  It is a great option to cover yourself and your loved ones, you must apply for it, in fact, ask your team member, help and other people around you to also apply for this scheme. 

        Having a government-backed scheme to financially protect your loved ones in case anything were to happen to you is a wise decision, especially if you belong to the low-income category. 

        You can also check for other 2 benefits provided by the government:

        1. Atal Pension Yojana
        2. Pradhan Mantri Jan Arogya Yojana (PMJAY)
        3. Sukanya Samriddhi Yojana
        4. Pradhan Mantri Shram Yogi Maan-Dhan



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