Category: Fanancial Literacy

Get the Best out of Online Shopping

13/8/2015

Executive Summary – People are increasingly shopping on online stores in India. If you use our online shopping tips like using coupons, using comparison websites, exercise the option of cash on delivery or credit card payment depending on the online store and item to be bought and taking a rational decision on whether to buy or not, you will be satisfied with your shopping experience.

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Source: https://www.pwc.in/en_IN/in/assets/pdfs/publications/2015/ecommerce-in-india-accelerating-growth.pdf

As you can see, there is quite an expansion in online retail. Increasing use of smartphones and tablets and increase in provision of internet services via 3G, 4G and broadband will fuel this growth. Consumers are increasingly liking to window shop in online stores and click to buy. It is easy and fun. How do you know if you are getting the best deals? There are also chances of fraud online. Here are some ways to make online shopping more effective and safe.

1. Search for coupons – Many companies give online coupons to attract buyers. Before buying online search for deals and coupons. One can find them on coupon sites like Groupon or on online marketplaces like eBay.

2. Cashback – Many websites give a cashback on use of credit and debit cards. Check which of them give the most benefit. Sometimes the cashback maybe in terms of further purchase on the website. It is better to then buy from an online retailer that you frequently visit/buy.

3. Comparison websites – There are many websites that display prices of popular branded goods across all web retailers. You should visit these websites to get the best deals. There is also a website called www.pricebaba.com which helps the buyer compare prices online and prices offline so your buying spectrum becomes even wider.

4. Tips before Purchasing – Before purchasing online, as a buyer, you should read the terms and conditions of purchase. You should know the course of action if delivery is not done, order sent is defective and return and exchange policy. If you are buying from a not very well known website, you should use the Cash-on-Delivery option. If you are not sure about the item, check the reviews. They can be helpful to determine the quality of the product and if it is useful to you.

5. Other tips – You can use different email ids to get advantages that a new consumer gets. Sometimes you get discounts if you add items to the shopping cart and do not buy it for some time. You can use websites like cashkaro.com to get additional discounts. One should also be careful while shopping online. For example, one should NOT click on links in emails from unknown senders even if there are great deals. Before downloading shopping apps, check the reviews and how useful they are. You should also check what permissions they require on your smartphone or handheld device.

6. Credit Card – Many of us use credit cards to shop online. In one way it is good, as if there is a fraud, you can report misuse, in most cases get the money back. Many cards have insurance inbuilt. But one has to take some precautions. You should check your credit card bill to see if any unauthorised online purchases have been added. Credit card payments should be made on time and we have to restrain ourselves from going overboard while purchasing which can happen when we use credit card and do not have to pay hard cash immediately.

7. Ask yourself if you really need the item – Online shopping can get addictive if you are not careful. It is so easy to shop online and get your brand new stuff at your doorstep. But before you buy, ask yourself if you really need it. You should have a good reason to buy it and if it is possible to postpone that purchase, you should.

With a little bit of care, restraint and smart shopping techniques, your online shopping experience will be a pleasurable one.

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Financial Lessons from Dr. A P J Abdul Kalam

6/8/2015

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Executive Summary – Former Indian President Dr. APJ Abdul Kalam passed away in July. He was a People's President and a man of many glorious accomplishments. We can imbibe a lot of his teachings like having a vision, being devoted to our goals, facing problems head on, being prepared for the worst and working hard to make our personal finances a success.

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Former President of India, Dr. APJ Abdul Kalam, an extraordinary man with numerous accomplishments leaves us with some valuable lessons that we can incorporate in our personal financial life

1) Have a Vision - If a person wants to achieve something, he should have a vision. The person has to have a concrete dream about what he wants to achieve and only then will he have a purpose in life and work towards achieving it. Similarly in personal finance, you should have a vision of how your financial status should be and what are the financial goals that you want to achieve. This will help you in knowing what steps to take towards achieving that and you will be motivated to do the same.

2) Absolute devotion to your goal – Setting goals is not enough. Sachin Tendulkar, the biggest cricketing icon of India and master batsman would practice for hours on the nets and work on his weaknesses irrespective of his fame, match result or awards. Similarly, once you have set your financial goals, you have to be absolutely devoted to work towards achieving them. You have to decide how to go about achieving them and start working towards them diligently. You have to spend time getting knowledge on latest news in financial markets, getting your finances sorted and take steps to achieve short-term and long-term goals. Once you have done the initial work, you have to review your financial plan and compare how the actual status is and tweak your plan and current financial status and portfolio to help you achieve your goals.

Great learning from the president

3) Face problems and solve them - Dr. Kalam said that one should not be afraid of problems instead defeat them. Similarly, you can face situations where your finances are hit. For example, an investment could go into a loss or you might face some unexpected huge expense. Instead of going into despair, it is important to think rationally. Maybe the investment should be sold off to mitigate losses or you could take up some job, profession or start a business to get an additional source of income. This will help you to mitigate the loss due to the additional unexpected expense.

4) Preparedness – Change is the only constant in our life. Expected and Unexpected changes keep happening in our life which affects our finances. He said that instead of complaining, we should be prepared. We should have presence of mind to take the best course of action. There can be emergencies which create an imbalance in the finances or unexpected conditions in the markets leading to negative effects on our investments. We should be prepared for such situations. We should have an emergency fund. We should have a Plan B so that we are able to recover from tough financial situations.

5) Hard work and Perseverance will lead you to success – Eddie Cantor, an American entertainer said “It takes 20 years to become an overnight success”. It is so true. You cannot become wealthy overnight or achieve all your financial goals in a short time. You need to constantly work hard towards your goals and take steps to build your wealth to become financially successful. On the path to financial freedom, you may encounter setbacks which might disappoint you. But one should persevere continuously, work hard and learn along the way to get success. At the same time, you should make your money work hard too. You should invest smartly so that the money gives you optimum returns. As President Kalam had said that God helps people who work hard, we should work hard to attain financial success.

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Financial Literacy is the key to a wealthy future

1/6/2015

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Financial Literacy in India is very poor. Every day one can hear several cases of Ponzi schemes and miss selling of financial products. What we need is to introduce our children and youth to the habit of saving and investing at an early age so that they can have wealthy and safe future. We can do this by teaching them budgeting at home, conducting seminars in school and colleges. It will be considered successful once the youth of this country is able to identify bad investment.

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It was 6 months back when Richa a fresh graduate from Mumbai University got her first job in an IT company as HR manager. She got a decent package of Rs. 6 lakh per annum. Her monthly expenses were around Rs. 20,000. Till now she has managed to save 1 lakh in FD, another 1 lakh rupees in saving account and also bought few grams of gold recently.

In order to make utilize her surplus amount she was looking for some investment option. She talked about this in her office and was then approached by an accountant from her company, who advised her to invest in ULIP with a premium of Rs. 75,000 a year. Later on she realized that she made a mistake and she could have invested the same amount in mutual funds which could have given her better returns and liquidity. After this incident she learned that it is very important to have little knowledge about financial products.

In today’s world for young investors, it is never too early to learn about how to save and invest money wisely. Today’s youth is not focused on money. It’s what money allows them to do, to follow their passion, to achieve their dreams. When the understanding of money making relates them to their aspirations then only they take interest in the financial markets and try to implement that knowledge.

Financial literacy for youth has become inevitable considering the fact that today’s school kids or college students have their goals decided from a very young age. If their ambitions are decided then why not start planning for it from now? Some key personal traits that can be inculcated in them can be time management, making a proper budget of their income and expenses, developing a proper mind set about savings and a proper knowledge of investments like mutual funds, insurance, stocks, debt, etc. Through proper financial literacy one can at least make sure that they will not lose their hard earned money or will not fall for any Ponzi scheme.

Let's Get Rich

There are a number of ways through which students/youth can get financial knowledge:

Parents should start giving allowances to the kids from young age to manage expenses on their own. This will definitely help them in understanding the importance of savings. For example parents can ask them to save for new video game due next year. This way kids will get an idea of how many months do they have to save and how to cut down on unnecessary expenses.
Schools can conduct Seminars on money matters wherein young students are taught how to save their money. That may include teaching them on how to prepare a budget based on their monthly pocket money given by their parents. As these students are quite young and not really ready enough to know exactly the investment matters, they can definitely be taught the concept and importance of saving their money.
Seminars can also be conducted in colleges wherein they are taught simple concepts of opening bank accounts and how do they work. In addition to this , they can be educated about investment atmosphere, wherein the meaning of financial terms like, stock, bond , debt , credit cards, insurance, risk management, etc. is explained. Early mastery of these financial concepts can let them take their personal financial decisions which can affect their quality of life and standard of living.
Students who go for internship or article ship should be encouraged for investing their savings. They can be asked to invest only 10% of their salaries which they can utilize for their future plans.
Professors can also share their views on the current market scenarios in the class can also encourage on current affairs in financial markets discussion thereby encouraging students’ participation in such matters.
Financial Planning firms can approach the college students and can help them decide on how much are they supposed to earn and invest based on what goals they have in mind .This way even students become a little more aware on what kind of job they are looking for and how to work towards it as they can get a clarity of the short term and long term goals of their future. They can then be explained the concepts of risk management and insurance.

Being financially literate can prove to be very useful in the later stages of life:

It can help you in managing you debt easily in later stage of your life. For example many people end up into a huge amount of debt in order to accomplish a goal of buying a house or spending through credit card and hence pay back through EMI. Thus, most of the income goes into paying back for the interest amount or the extra expenses of credit cards. This same amount if invested into mutual funds, debt or equity can fetch a huge lump sum. If planned well one can avoid such situation.
Being financially literate helps in creating a culture of savings. Keeping record of one’s daily expenses helps in understanding the basic concept of budgeting and hence utilizes their salaries or income accordingly. It keeps a check on one’s spending habits and thus helps in cutting down unnecessary expenses.
Understands the difference between saving and investment thereby plan investment strategies for today and tomorrow.
It also helps in understanding the financial product better and hence reduces the chance of miss selling.

It is always advised never to make savings or investment decision without properly understanding its consequences. Hence, we can say that it is ultimately our responsibility towards our financial success. A little effort toady can make our future bright. So let’s start contributing towards our wealthy future by reaching out for help. Also let’s take pledge to educate our neighbour, colleagues, friends and children regarding financial products and their pros and cons. Then only we can have financially literate India.

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Yours truly

Get the Best out of Online Shopping

Download PDF

Financial Lessons from Dr. A P J Abdul Kalam

Download PDF

Financial Literacy is the key to a wealthy future

Download PDF

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Yours truly

Get the Best out of Online Shopping

Download PDF

Financial Lessons from Dr. A P J Abdul Kalam

Download PDF

Financial Literacy is the key to a wealthy future

Download PDF

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​Categories

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