Around children’s day, I came across smart things to read about inculcating good money habits in kids. Views from parents, counsellors, psychologists to doctors merged to give a great view on money handling. Naturally a lot of reading resulted in a lot of discussions too.
Interestingly, in my chat with a fellow momey, she confided that she herself has a dilemma regarding money. I asked her what is she talking about and she said that being an avid saver she manages to save 10-15% of her monthly expenses. I complimented her on such a feat and wondered what her problem was. My friend said ever since demonetization came unannounced, she doesn’t know where could she channelize her monthly cash savings. I have to admit the more I thought about it the more I got convinced that many momeys could be finding themselves in the same position perhaps.
I probed my friend a little more and she said she would often be able to collect lac plus amount over a period. And this large sum would find way to her jeweler. She would be able to gift herself latest designs of gold ornaments. I piqued and asked why jewelry. She said the amount was too much to spend on clothes or any kitchen items. All the larger expenses are anyways taken care of husband.
But now she is scared to make jewelry purchases also. She doesn’t want to share her details or make properly billed purchases which can be tracked back to her. Jewelry was meant to be her silent reward to herself.
Having understood her predicament, I asked her why doesn’t she put the money in the bank and to my surprise, she said she doesn’t operate thhe account herself, it’s a joint account with her husband.
Now momeys if you have also found yourself in a similar situation, you have a sweet start to make. The first and foremost is opening your bank account. Once you have your own account, you can simply deposit your savings or open a recurring deposit. It is one of the better ways to harness your saving discipline.
If you want to do better, then monthly surpluses can be utilized most efficiently with a Systematic Investment Plan. It can be a great way to see your small savings grow into a spectacle.
If you still prefer the traditional investment of gold then opt for digital gold. Digital gold is a mix of virtual & real gold. You can pay online to buy gold into your online account. Once you reach purchase worth 5 gms you can either take physical gold’s delivery or keep buying online. This is great if you have long term use of gold like child’s marriage, to ensure safety. There’s also an option of Gold Exchange Traded Fund but that can be your level next.
Its been a year since demonetization and my friend has amassed her year’s fortune. So I am making her an appointment with the bank representative to come over for account opening in the coming week. Did you say? #MeToo
Diwali storms up the social whirlwig; food, dress up and meet up is all on cards. The usual worry of how to keep the kids gainfully occupied is thankfully averted during such catch ups. They find playmates and enjoy their time, which for us parents is a huge load off.
This diwali, we too had some great fun socializing. A new parent couple among our friends got talking about how responsibilities are keeping them engaged. Life has been very different after their child’s birth and one responsibility they can’t get a handle on is money planning. More discussions among the group led to finding out that it is a rather widespread question, parents are grappling to figure. It obviously became imperative that a blog post covers the topic of planning our children’s future.
Before setting out on a task, we have to understand what is it going to achieve. So parents unanimously voted Education and Marriage as goals to work for. Both are gargantuan expenses and require disciplined action. Depending on your age, children’s age, your risk profile, choice of education field and costs involved you will have to ascertain a sum required after a said amount of time. We are mentioning the tools you can use for investing.
When you keep a horizon as long as your child’s growing up years, SIPs in small to mid cap funds and balanced funds are your best bet. They let your money gain with the benefit of compounding year on year. For those with some risk appetite, consider funds which invest a considerable part in equities of growing companies. Balance funds are slightly less risky because they have equity and debt (such as term deposits, bonds) instruments both.
For the uninitiated, SIP is Systematic Investment Plan better known as ‘the good EMI’. You invest every month a fixed sum as small as Rs. 500 into a mutual fund. The fund is managed by a team of experts and they in turn invest in various instruments to generate returns. We have more posts on MFs coming momeys 😄
Sukanya Samriddhi Yojana
This has to be our favorite for those who have daughters. The scheme encourages parents to build a fund for the future education and marriage expenses for their female child. The scheme currently provides an interest rate of 8.3% p.a. (new rates are likely to be announced). It allows deposit upto Rs. 1.5 lacs in the name of your daughter every year and it matures when she reaches 21 years of age. You can either choose monthly or yearly contributions. Momeys should absolutely consider monthly contribution!
Well it’s not our favorite, but we have to bring it into discussion to give you our reasons. If you search online for children investment options, you will find a gazillion ads by Insurance companies luring you with child plans. What should you do? Well our advice would be to ignore. They are mostly selling ULIPs to you which are far inferior in returns to mutual funds and charge expensive premiums. You might as well directly invest in MFs through SIP.
However, we have to add that you must take insurance, as life cover to safeguard your family and children in an unlikely event.
Gold ETFs are exchange traded funds that passively track the performance of Gold Bullion. These funds buy gold with investor’s money (on the behalf of investors) and convert it into units.
Gold Exchange Traded Funds can also be an option if you want to invest for using them during marriage. These are traded on stock markets and are a great alternative to physical gold.
With children, you wouldn’t want to take a chance. So invest today for their tomorrow.