As personal finance professionals, when we look at customers, we are accustomed to looking out for risks which can play out and finding ways to mitigate them. We hope that a family which had given adequate thought to many of the risks, would be able to manage well, in any unforeseen emergency. We have now realized one important factor which we have not been emphasizing on, through a recent unfortunate experience.
While we all plan for our dependents post our demise, rarely do we think of us being in a situation where we are temporarily incapacitated and are dependent on our family to take charge. A recent experience made us think, and these are some of the conclusions we have come to.
We conducted an employee investor awareness program for a corporate recently. It was very well received with attendance much in excess of what was expected.
As part of this program, many of the attendees opted for a one-on-one consult on their personal finances. This exercise made us sit up and take larger notice of something which we have been seeing on and off over the years – the fact that many people make simple yet fundamental mistakes which can seriously hamper their wealth creation journey. We list out five of these mistakes below.
For most of us Diwali is that time of the year which spells joy, laughter, togetherness and gratitude. With the festival being just round the corner, last minute preparations must be on at a frenzied pace to ensure that nothing is left to chance and another Diwali goes by joyously, adding to beautiful memories.
Every festival comes with its own set of rituals. We worship goddess Lakshmi during Diwali. Lakshmi is the goddess of wealth and ushers in prosperity and wealth. It is very interesting to see how some of these rituals lend itself to financial well-being and wealth building. So, this Diwali, take a leaf out of your festival routine and spruce up your personal finances!
We are all aware that retirement is inevitable. It is a very important phase of your life which requires careful planning and thought since it is one goal for which you are not going to get a loan. However, one always feels there is plenty of time for retirement and hence planning for it takes a back seat.
Retired life can be a joyful phase in your lives, filled with abundance and time to fulfill some long-suppressed desires, provided you plan much in advance. The list of mistakes one makes when one plans for retirement is quite long, let us look at three of them today.
All of us love vacations, and the very thought of a vacation is good enough to cheer us up. Why then is it so difficult to enjoy the longest vacation of your life – “Retirement”?
Many of us do wake up to the impending retirement and the financial needs for the same at least a decade before we retire if not earlier. What I am referring to here is therefore not money but the important aspect of how to keep oneself busy and add meaning to retired life.
It is all very well to eat, drink and make merry when you are on a short holiday, but can you think of doing that and nothing else for years? When we look at retirement from this context it is sobering indeed! Imagine, we need to spend one third of our lives in retirement and yet we don’t give it the mind space it deserves.
Dealing with the aftermath of Covid wave 2 has been unsettling and depressing. The family which has lost a loved one suddenly needs to deal with a lot of chaos and confusion, not even allowing them to grieve in peace. This is primarily since in most households, one spouse takes the lead in handling finances and related matters. The other spouse naturally gets complacent that these matters are being taken care of and hence doesn’t even attempt to get a broad picture of the state of assets, liabilities etc.
While this experience has given a lot of action points and mistakes people should avoid, we will concentrate on liability, especially the home loan for the sake of clarity.
Employee Deposit Linked Insurance or EDLI is a mandatory insurance scheme for private sector employees who are enrolled into EPF. The quantum of insurance provided depends upon the salary (salary refers only to Basic and DA) drawn in the last 12 months before death. The insurance paid out is subject to a minimum of two point five Lakhs and maximum of seven lakhs.
Read more about EDLI in our article published in Money9 below and propagate this widely to help families in distress.
The past year has been uniformly difficult for most of us. However, for some people lower down the pecking order, things have been unimaginably bad. Most of us do help someone out financially, but usually this is a one-off case done without much thought.
My conversations on the topic of giving with most people always leads back to the same position, we are not there yet. When do you start giving? When do you acknowledge that you have enough for your needs? After all our wants keep expanding and the list is endless. If we wait to take care of all our wants, we are essentially guaranteeing we will never be able to give in our lifetime.
How do you plan for your financial well-being? Are the priorities the same for everyone or does it differ depending on your unique circumstances? In our experience over the years, we have noticed that a one-size-fits-all approach does not work when it comes to your finances.
When it comes to single women specially, their circumstances are different and to an extent unique, driven by not just their needs but also the prevailing laws, and therefore need to pay attention to the following.
Conventional wisdom has it that financial planning is the same irrespective of gender or marital status. I have interacted with a disproportionately high number of single women and beg to differ. The challenges that are faced by these women are vastly different.
|How then should they go about putting the pieces of their financial tapestry together?