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How does the Step-up SIP calculator work?

How does the Step-up SIP calculator work?

In the previous article, we learned how to use a SIP calculator to estimate your expected return over a given period with a fixed amount of monthly investment and an expected rate of return. In this article, we will discuss the Step-up SIP calculator.  SIP (Systematic Investment Plan) is a method of investing that requires consistency in investments, even if the amount is small. It focuses on time and needs the compounding cycle not to break.  What is a Growing SIP Calculator (Step-up SIP calculator)?   The SIP investment format has great potential to build wealth for you. However, if you step up your fixed periodical investment amount by some percentage every year, you will generate more returns and have a massive corpus.   Stepping up your SIP is beneficial if you have constant income growth. For example, if you are currently investing Rs 10,000 a month in your SIP, then after one year, you increase your monthly investment amount by 15% and keep on doing this in successive years. This method of increasing your monthly investment is called stepping up your SIP. How does a Growing SIP Calculator (Step-up SIP calculator) help?   A Step-up SIP calculator will give you the future value of your SIP investments which you keep on increasing periodically by a given percentage. This calculator is different from the average SIP calculator in one sense it requires the step-up percentage as an input as well.   To calculate your returns, you have to input the values of your monthly investment amount, the growth percentage of your SIP investment, the expected rate of return, and the tenure of investment. Source: Edufund The step-up calculator is helpful to you as an investor in the following ways Get results about complex investment scenarios with a single click Obtain the estimated potential returns   Compare various SIP options by varying the inputs in the formula   Assists you in making well-informed and calculative decisions regarding your investments Free-of-cost calculation   Easy to use   Benefits of SIP 1. Financial discipline  When you opt for a SIP, you indirectly get into the habit of keeping aside an amount of money from your income for investment. The fact that there will be a monthly deduction towards a scheme will ensure you keep track of your income and expenses on a periodical basis to ensure the investment is not hindered. You also will be planning your expenses after you have invested an amount at the beginning of the month.    2. Fund managers Mutual fund investments are supervised by professional fund managers who have proven experience in managing portfolios. They observe market trends and make wise decisions in order to grow your money and minimize major losses. This will be a great advantage for someone who is not well-versed in investment and struggles with financial jargon. When you choose SIPs, you invest money periodically and have a professional fund manager overseeing your investments.    3. The fruits of compounding  The returns on your investment benefit from compounding. Compounding means you don’t just get the return on what you spend out of your pocket but also what you earn from it. This basically leads to your corpus getting richer with time. You can enjoy the power of compounding when you choose a SIP and stay dedicated to the investment for a long time.   4. Rupee cost averaging This is one of the major benefits of compounding. When you invest an amount through SIP, you do not need to worry about timing the market. You buy a high number of units when the NAV is low due to the markets, and on the other hand, you buy a lesser number of units when the NAV is high. This factor of SIP ensures the overall cost of purchasing mutual fund units averages out over the tenure of investment. Important points to note about the Growing SIP calculator (Step-up SIP calculator) Systematic Investment Plans come with semi-annual and annual stepping-up options. As an investor, you cannot increase the size of an existing SIP; the option becomes active only if you select the option concerned while setting up the SIP.   If the step-up option is not selected, you will need to start a new SIP by selecting the step-up option.  A valid reason to step up your SIP is the logic of raising your savings with your rising income. You can directly transfer your increased savings into your existing SIP if you have a Step Up SIP instead of creating a new one.  You can automate your SIP settings to raise the investment amount to the necessary level without worrying. For example, if you are sure of getting an income raise of 10%, you can enter the step-up percentage at 7% - 8%. The longer you invest, the longer you allow the magic of compounding to work. FAQs How is Step Up SIP calculated?   The Step-up SIP calculator helps you calculate your returns. For example, if you invest Rs.5000 through SIP monthly and decide to step up your SIP amount by 10% every year, your investment amount will increase to Rs.5500 for the next investment tenure. Why is Step Up SIP better? Step Up SIP is one of the best options for people who lack financial discipline. They, most often than not, fail to increase their SIP amount when their income increases. A step-up SIP will automatically raise their investment amount by a predetermined percentage every year. Which SIP is best for 1000 per month? Franklin India Feeder Franklin U S Opportunities Fund for SIP Canara Robeco Bluechip Equity Fund for SIP. Canara Robeco Emerging Equities Fund for SIP. Nippon India Value Fund for SIP. Nippon India Arbitrage Fund for SIP. Which SIP is best for 10 years? Franklin India Technology Fund ICICI Prudential Technology Fund PGIM India Global Agribusiness Offshore Fund Aditya Birla Sun Life Digital India Fund SBI Technology Opportunities Fund
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Ways to save for your child's MS in the UK

Ways to save for your child's MS in the UK

The United Kingdom has a long tradition of intellectual success. It is one of the well-liked destinations for overseas students pursuing higher education. Regarding MS, UK institutions are at the frontline of offering a diverse selection of courses according to the student's interests.  MS in the United Kingdom provides full-time 1 or 2-year long courses. Specialists from various roles, industries, and courses are available at UK institutions, allowing overseas students to follow their selected degree programs. Popular MS specializations in the UK The following is a listing of the best MS Specialisations in the UK for Indian students. MS in Biology (Sciences)  MS in IT & Networking  MS in Engg (others)  MS in Geology  MS in Computer Science & Engineering  MS in Health Science  MS in Electronics & Electrical Engineering  MS in Mathematics Ways to save for MS in the UK A Master's degree might boost your child’s income potential. It might also be an opportunity to explore something your child is interested in. Saving in advance is the most effective way to reduce the expenditure burden your child will have to handle with student loans. Here's how to get started. 1. Set a goal and a budget for savings Setting a clear objective for the amount to finance your child’s Master’s can assist you in planning for the future. Calculating how much you'll need to save boils down to weighing costs. First, estimate how much money you'll require to pay for their tuition and living expenses. Then consider obtaining student loans, but proceed with caution. Calculate the monthly payment cost of the loan after your child graduates. 2. Refinance private student loans To save money, refinance outstanding private student loans. If your child is currently paying their student loans with a bachelor’s degree, the interest rates may have decreased since then. Interest rates on student loans are predicted to surge throughout 2022. In June, the federal funds rate was raised by 75 basis points, and fed officials anticipate future hikes. This might result in increased interest rates on both private & federal student loans. If you hold private student loans, refinancing replaces your loan with a new loan with a reduced interest rate. Refinancing existing student loans may allow you to free up a few additional rupees in your monthly budget for savings. 3. Choose the best option to start saving There are several options to save for future college fees, ranging from a traditional high-yield savings account to a college investing account. However, the best way to save will be determined by the timing of your strategy.  Select investment programs that offer investment possibilities customized to various periods and risk sensitivities. If you gradually adapt to being more conservative, you may invest more aggressively. Some of the options to start savings include - Mutual fund investing US ETFs (Exchange Traded Funds) Purchasing insurance policies Purchasing real estate Making an investment in PPF With these ways to save for your child's education, you may stop worrying about the cash needed to send your child to his or her ideal college. 4. Prepare early savings Investment needs time to mature. Education costs are often long-term goals that require more than five years to attain. Consider how much time you will need to create your children's education fund for MS in the UK.  The more time you have, the lighter your load will be. The sooner you begin investing & saving, the better. Top 10 MS colleges in the United Kingdom There are around 115+ MS Colleges in the UK. MS costs about INR 27.40 lakhs in the UK (approx.). The top specializations are IT and networking, Engg (others), Biology (Sciences), Geology, Health Science, Computer Science and engineering, Electronics and electrical Engineering, and Mathematics.  A bachelor's degree + Statement of Purpose (SOP) + IELTS/TOEFL/PTE score+ Letter of Recommendation (LOR) + GMAT/GRE scores + resume + job experience is required for admission. Consider looking at the best colleges in the UK for overseas students seeking an MS. Top MS Courses in the United Kingdom MS tuition prices in the United Kingdom Conclusion According to Census Bureau data, earning a master's degree may earn you up to $400,000 more than a bachelor's degree throughout your life. However, because this is throughout a lifetime, you may not see any significant financial rewards at first. As a result, it is critical to begin planning and conserving as soon as possible.  Senior financial counselors and planners urge parents to examine the higher education level they expect their children to achieve before developing a plan. More importantly, gathers information about current tuition costs and detects yearly increases. Make wise financial decisions, and you'll experience a lot less worry in the future. Consult an expert advisor to get the right plan TALK TO AN EXPERT
Should you book short-term profits on your SIPs?

Should you book short-term profits on your SIPs?

“We don’t have to be smarter than the rest. We have to be more disciplined than the rest”. Warren Buffett. In a volatile market, many investors see their portfolios as sometimes positive and sometimes negative. So, there are some investors who asked if should we book short-term profits on our investments or if should we hold them. Read on to know what you should ideally do. Why did you start SIP? First, answer yourself why you have started a SIP. With what objective you have started your investments? Generally, people save and invest their money with long-term objectives like saving for a child’s higher education, retirement, buying a house, buying a car, etc. Mostly we make investments to achieve our financial goals. The volatility in the market will always remain there, but we need to stick with our goals and investments. When should you book profits? Investments in mutual funds should be based on financial goals. If you have achieved your financial goal, then you can book profits or redeem your units to utilize the amount for that specific goal, or you can book profits when you are near your goals, and you have achieved your financial target, or if your fund is underperforming. In such scenarios, you can book profits. Majorly investments in mutual funds are for long-term financial goals. You should avoid booking short-term profits on your SIP. Additional read: What are alternate investment funds? What if the market crashes or falls? In case, if the market crashes or falls, then should either consider it as an opportunity to buy at a lower level or remain invested with your SIP. Don’t get fear out with the fall in the market. In the short-term, the funds or market may not perform, but in the long-term market has generated positive returns. Nifty 50 Performance in 6 months and 5 years’ time frame Power of Compounding Compounding is basically earning profits on capital invested and profits as well. It’s like getting interested in interest and principal amount. The longer you remain invested the better compounding will work. Let’s understand this with an example, suppose there are two-person A & B and both are planning for their child’s higher education, but A has 10 years to save and B has 20 years to save and both have invested in equity mutual funds. Let’s see the difference in their savings amount. In the above table, we can see that person A’s invested money has just got doubled but person B’s money has grown to 5x because he has more time to save for his goal. The more you remain invested, the more benefit you will get out of compounding. Conclusion The wealth is created over a long-term period, not in the short-term. Consider investing with a financial objective and stick with your investments, don’t let the market volatility impact your decision. Only redeem or switch your investment if your funds are not performing, else remain invested and let it grow. Consult an expert advisor to get the right plan TALK TO AN EXPERT
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How to save money from your salary every month?

How to save money from your salary every month?

It's vital to save money if you want to fulfill your or your child’s ambitions. While some may be fortunate enough to receive a monthly paycheck that is sufficient to fulfill their needs and aspirations, many are forced to scale back their goals after barely managing to pay their bills. How can you save money from your salary every month 1. Make a monthly budget plan The key to saving money is to keep track of your spending and limit your costs. By separating your costs into important areas, create a monthly budget plan and follow it. Since the budget will help you avoid going over your spending limit, you will have extra money to save down each month from your income. 2. Avoid credit cards or personal loans Avoid utilizing credit cards and personal loans, even when they are freely accessible. These two approaches both lead to steadily increasing debt that finally prevents you from having any control over your monthly spending. Use UPI as often as you can to make payments because there are no transaction fees involved. 3. Avoid making fancy purchases Young people typically want to dine outside, watch a movie, shop online, and go to the mall. But are these costs actually necessary? It is quite possible to live without overindulging in these as they are luxury. Depending on your budget, place a limit on these pleasures. 15% of your salary is the generally advised maximum for fun and pleasure expenditure. Make careful to adhere to this cap at all costs. 4. Low-cost entertainment ideas Another area where you might be able to save money is entertainment costs. You might be able to reduce your movie expenses with the abundance of subscription options accessible, such as Amazon Prime, Cable, and Netflix. Consider indulging in outdoor activities like hiking or camping as an alternative to spending money. Additionally, having fun shouldn't be expensive. As an alternative to going out to eat, think about hosting a house party or potluck dinner. 5. Track your spending We don't stick to our budget, which is one reason why we spend too much money. You must accept responsibility for your actions if you wind up spending twice as much on everyday meals as you expected. You'll be able to see how your pay is being spent if you keep track of your expenditures. Study your expenditures over the last several months before setting aside money from your salary. We frequently observe that there are districts that we might eliminate to concentrate on conserving. 6. Take care of debts As soon as you start working, you are most likely to be subject to debt bondage. When you have fewer commitments and more access to credit card purchases, it might be difficult to resist the temptations toward uncontrolled consumption. Knowing the difference between needs wants, and greed will be helpful. There are other ways to accumulate debt besides using a credit line. Start investing with SIP and debt mutual funds This is well-liked since the returns are steady. This alternative is available to those who are hesitant to invest because of the hazards. These funds make investments in treasury bills, government securities, markets, commercial paper, and other financial instruments. Debt mutual funds do, however, carry credit and interest rate concerns. Even though there is a tonne of online advice on where to start, investing may seem scary to beginners. A crucial step would be to do research. Use a systematic investment plan (SIP), which is very simple and sensible, to start small while you decide how much work you want to put into investing and what kinds of investments you want to make. If you're not sure what you want, it's a good idea to ask a professional expert for guidance. They can walk you through your options and help you choose something that will make you happier and more involved. You may contact our professionals at EduFund, and they will assist you with the proper course of action for investing. Download the EduFund app and create an account to start investing. With zero charges and no hassle account opening process is from the comfort of your home. How much salary to invest in mutual funds? There are a lot of investing guidelines that can be used as a guide, and the 50:30:20 rule is a wonderful illustration of how someone should normally invest 20% of their monthly wage. Depending on your level of risk tolerance, there are many types of mutual funds. Index funds, debt funds, multi-cap funds, hybrid funds, and equity funds are a few of them. Building a financial safety net for you and your family when you aren't working is dependent on saving money as you go along. It might be a wise use of funds to put some of your profits into the best investment programs. Not only will it secure your future, but it will also develop your financial discipline and assist you in achieving your own objectives. TALK TO AN EXPERT
How to save money to buy a house?

How to save money to buy a house?

It may seem hard to save enough money to purchase a home. But if you have a strong savings plan, anyone may accumulate enough cash for a down payment on the home of their dreams. Tips to save money to buy your dream house 1. Build a better budget Setting a budget is a very crucial step in the saving process. It is tough to redirect money to your down payment if you don't know where your money goes each month. You need to be very careful in calculating your monthly income, taking into account any income from a spouse or partner who will also be helping with the down payment.  Next, gather all of your payments and credit card statements in one place. Take a look at your spending patterns. Keep track of how much you spend on basics like utilities, rent, and student loan repayment. Next, think about how much money you spend on non-essentials like entertainment, dining out, etc. each month. If you want to avoid doing this manually, a budgeting tool can help you automate the process. Getting the assistance of a financial counselor might give you a better concept of what your budget should look like if it all still seems too daunting. Once you've broken down your spending into categories, search for places you may make savings. For each category, establish a firm (but reasonable) budget and adhere to it. Make sure to set aside a particular amount of money each month in your budget for your down payment. Think of your savings as a necessary cost. 2. Stick to the 50-30-20 rule Following a 50-30-20 budget, where 50% of your take-home income is set aside for fixed bills, 30% for any discretionary needs, and 20% for savings, is one way to make significant savings. Although it won't be simple, giving up conveniences you may otherwise be able to afford will be well worth the effort after you move into your new home. 3. Search for other employment options  Even if it isn't always practical, changing professions and earning a larger salary might help you save money for a down payment. To find out if you make as much money as those who hold positions comparable to yours, look through websites that list job openings and wage comparisons. Consider using your results as leverage to negotiate a raise or ask about a promotion at work if you find out your income is below the industry average. Consider looking for higher-paying jobs you are qualified for if you don't enjoy your job or can't obtain a raise. 4. Consider making lifestyle adjustments You should think about major lifestyle adjustments if you are committed to buying your own house. Moving temporarily to a smaller apartment is one option that might help you save a significant amount on your monthly rent. In addition to your regular job, you could think about alternative income options. You may save for that down payment on your house by doing both, living within your means for at least two to three years, and reducing spending like vacations, entertainment, and other expensive memberships. 5. Invest in profit-earning instruments You must invest in various types of money growth instruments to accumulate a corpus of at least INR 50 lakh over the next ten years. Doing so will allow you to earn a respectable rate of appreciation throughout that time. Consider investing in mutual funds, fixed deposits, public provident funds, or all three (PPF).  Mutual funds can help you earn returns of between 9 and 15 percent annually, depending on the coverage you choose. PPF, on the other hand, gives an interest rate that is around 7.1% yearly compounded. The ability to start an account with as little as INR 100 is the nicest aspect of investing in a PPF.  Unlike mutual funds, investing in PPF carries no risk at all. You may contact our professionals at EduFund, and they will assist you with the proper course of action for investing. Download the EduFund app and create an account to start investing. With zero charges and no hassle account opening process is from the comfort of your home. 6. Try a systematic investment plan (SIP) A Systematic Investment Plan (SIP) enables a recurring investment of a defined sum into a mutual fund program. With a minimum commitment of INR 500, you may participate in a mutual fund plan via SIP and take advantage of rupee-cost averaging and compounding. When you consistently invest, regardless of the state of the market, you usually end up with more units during times of low demand and fewer during times of strong demand. This substantially lowers your entire investment cost. The down payment amount might range from thousands to even lakhs in rupees, depending on the home you pick. It's wise to conduct some study and select the option that best satisfies your emotional requirements and preferences as well as your financial circumstances. TALK TO AN EXPERT
How to save money with a 20000 salary?

How to save money with a 20000 salary?

In India, most people earn less than Rs 20,000 a month, and in such a high inflationary environment, it becomes challenging to save money from your salary. Saving is as important as meeting your current needs; it helps you prepare for your future goals and save for an emergency. Let’s find out how to save money with a Rs. 20,000 salary in India!   Developing a habit of saving may be difficult for many salaried people, but in the long run, it can be very beneficial. It not only helps you accumulate wealth, but also teaches you to budget your needs, and expenses, save on unnecessary expenses, and allows you to make the most of your hard-earned money.  Whether you earn 20,000 or 2,00,000, investing and saving a percentage of this income is a habit thousands of millennials and Gen Z are picking up gradually. Ways to save money with a 20000 salary 1. Make a monthly budget before each paycheck Making a monthly budget will help you keep track of where your money is going and control your expenses. Making a monthly budget will help you to categorize your monthly spending. This will help you to avoid overspending, and you will be able to save some money from your monthly salary. 2. Try to clear debt with high interest rates If you have taken any loans, then try to pay off debts with the highest interest rates first. If you have not taken any loans, then try to avoid taking any fresh loans. For instance, a personal loan attracts huge interest. One should always avoid taking it into consideration. 3. Cutting down on monthly expenses You can cut down your monthly expenses in many ways, like lowering the expenses, credit card spending, electricity, mobile recharges, entertainment expenses, avoiding outside food, prudent grocery shopping, transportation, etc. By saving a few bucks from each category, you can actually save a lot of money. 4. Start investing your savings Just saving money will not help in any way until you invest it in the right asset class. If you are just saving and not investing, then your money is losing its value with time. So, investing becomes the most important part of your savings. In investing, the most critical factor is time. You need to start investing as soon as possible. You can also start your saving and investing journey with just Rs 500. The idea is to start early, even with a small amount of money. 5. Cancel unused subscription You might have taken subscriptions from different websites like Netflix, Amazon Prime, etc., but you are not using those monthly. So, you can cancel all your unused subscriptions and save a couple of bucks every month. How to save 50 lakhs for a child’s bachelor’s in New Zealand? Read More 6. Avoid late fees Avoid late fees on loans. Avoiding late fees can help plan your expenses and become systematic, and you can save money. A late fee is an extra expense that might not be planned or part of your budget. 7. Prudent grocery shopping Grocery is a must for every household and is important. One can save money in grocery buying in different ways like one can go for bulk shopping so that it will reduce the per unit cost. Another way could be to get a shopping card which allows a discount on monthly grocery shopping. 8. Shop during sales Shopping during times of sales will definitely be going to help you save money. During sales like Diwali or summer, you can find heavy discounts on clothing and other accessories. 9. Avoid impulsive buying Impulsive buying means an unplanned decision by a consumer to buy a product or a service. So, one needs to avoid impulsive buying, and if you make an unplanned decision, this will increase your unnecessary expenses. And you will end up buying things which are not important. 10. Pay yourself first Remember to pay yourself first. Do not compromise on your health; upgrade your skills, and reward yourself first. Always remember your health is wealth. Conclusion By following the above-mentioned steps, you can start saving early and develop an investment plan. Don’t wait for your salary to increase to start saving, even if your salary is low, you can start as small as Rs. 500 every month and watch how this small amount grows. Budgeting and saving small sums of money can make a huge change in your savings habit, meeting future expenses, etc.  Just ensure that you analyze the benefits of your spending. Make short-term goals to help you save money. If you save today, then you will be able to tackle any kind of emergency in the future.
Ultimate guide: Ways to save money in India

Ultimate guide: Ways to save money in India

As someone once said, "He who buys what he does not need steals from himself". Saving is an art; one learns to master it with time, but you don't have to wait. You can know how to save right now! Here is the best way to save money in India and learn from others so you don't spend more than you need to.  1. Save money by budgeting Budgeting your expenses is the most underrated yet obvious way to save money in India or elsewhere. By calculating your spending and where you are, you can find your monthly costs and check whether they fall within your income bracket.    Budgeting can help you understand where you are overspending, how to cut back on your expenses, and whether there is a leak in your budget, for example, a TATA Sky subscription you no longer use but are being charged for it every year. Take out your bank statement, assess where you are spending most of your money, and start budgeting. You don't have to cut down on all your luxuries, but you can eliminate the ones you no longer need or enjoy!    2. Save money by shopping online    Another best way to save money in India is to reap the benefits of digitalization and online shopping. Most brands offer great discounts and offers on items online to attract customers and retain them for the long run. For example, check different online shopping sites if you want to buy a TV. Figure out the best price by comparing it with various portals. You can also use this practice to book trips, hotels, and flights and easily save money in India.    3. Save money by using public transportation    Another way to save money in India is to use public transportation! India's metro cities are well-connected, and the availability of public transport helps Indians save money easily. This practice is not only good for your pocket but the environment. If you travel by private cabs to your office or college, switch to local trains, metro, or buses. If you use your car for daily commuting, look for carpooling with your co-workers or friends. This is a cost-effective way to save money on daily commutes for you and your colleagues.    4. Save money by avoiding lifestyle inflation   Most people fall victim to lifestyle inflation around the world. If you have increased your spending with an increase in your salary, you are a victim of lifestyle inflation. It is a phenomenon wherein people's wants increase with a rise in their incomes. It's easy to fall prey to this phenomenon because most people are unaware; a yearly bonus spent on a spontaneous trip or buying a new iPhone as soon as you receive your salary are some examples of lifestyle inflation.    Try to be conscious of your expenses and not spend your increment on luxuries or wants. Instead, try to save and invest it to make the most of your savings in the long run.    5. Save money by investing    Shockingly enough, only 2% of the Indian population is an investor in the stock market. Most Indians are averse to investing and miss out on an opportunity to create a rich corpus for themselves. But the scenario is changing; more and more people understand the benefits of saving and investing through social media. The opportunity to start investing as low as Rs. 100 or Rs. 500 has opened doors for people with no substantial disposable income but who wish to start soon and be regular.    Make the most of this finance trend in India; invest wisely and consistently so that you can save money on long-term goals like a house, your child's education, or an international trip! Explore SIP as an investment method and start saving Rs. 1000 every month in your chosen fund, ETF, or stock. You can also consult a financial advisor if you are new to investing and require expert guidance!   6. Saving money by creating passive income    Saving money also requires creating different income sources, so you do not have to rely on one source. This is a tremendous savings tip because it protects you in times of recession and job loss. Some ways to create passive income would be to invest in stocks that provide dividends to their stakeholders or skill-up to sell services like consultancy on jobs.    7. Saving money by reducing your debt   Another way to save money in India is to work towards reducing your debt to a manageable amount within your income. Try not to purchase too many items on EMI, no matter how attractive the monthly cost may be. Please avoid using your credit card for every purchase and limit your monthly expenses so you don't create a mountain of debt without realizing it.    You can use these tips and the best ways to save money in India to build a sustainable lifestyle. Avoid overindulging, and try to understand your cash flow so that you can save your hard-earned money.  Consult an expert advisor to get the right plan TALK TO AN EXPERT
Complete guide: Ways to save money in a middle-class family?

Complete guide: Ways to save money in a middle-class family?

Saving money in a middle-class family is stressful. Lack of finance knowledge, poor budgeting, relying on a single-income family member, and increasing prices of daily goods and services are some of the biggest barriers to saving money in a middle-class family.  Another core barrier is saving in FDs over investing. Most Indian middle-class families prefer to keep their money safe in fixed deposits or savings accounts which do not offer attractive returns that could beat inflation.  If you too are struggling with wealth creation then here is how to save money in a middle-class family to secure your future. 1. Make term insurance your best friend Buying term insurance is one of the easiest ways to save money in a middle-class family. The cost of buying term life insurance is pretty low, especially if you are young and healthy. Most insurance companies offer term insurance worth lakhs at an affordable yearly premium of Rs. 12,000-13,000.  Term insurance can give your family a good cover amount in case of uncertainty of death. Always think about protecting your family through the right term life insurance.  2. Make saving a monthly chore When it comes to savings, make it a habit. Whether it's savings small sums of money in digital gold or a PPF account monthly, savings should be treated as a habit and a monthly chore!  Start this practice with “pay yourself first” by setting aside money from every paycheck. The next thing you can do is, save for multiple goals like an emergency savings fund, vacation fund, down payments, education corpus for your child, etc. Stick to this plan to the best of your ability and find the best home for your savings. Additional read: What is the education gap? 3. Wealth creation via monthly SIP  The best way to save money in a middle-class family and work towards wealth creation is to start a SIP! You can invest very small sums of money every month regularly for a long period of time and create a healthy corpus by the end of the period.  4. Place a limit on your credit card use  Avoid using credit cards frequently! Most financial advisors urge clients to limit their credit card use to 30% of the total available credit. For instance, if you have a credit limit of 5,00,000 then the credit you can use is 1,50,000!  Credit card companies offer attractive schemes to trap you into spending more so be careful. Another way to save money is to always pay your credit card in full amount rather than the minimum pay offered by the card companies.  5. Set a shopping budget for yourself  Make a habit of thinking before buying a particular thing. There’s a difference between want and need. If you cannot differentiate between the two, you cannot save money in a middle-class family. Before buying, you should analyze whether you need it or you want it. Give yourself a week to decide. Spending that much time will make you think twice and buy only what you need.  If you enjoy shopping then give yourself a shopping budget and try to not overspend on it! 6. Compare costs before spending In our rush, we sometimes forget to compare product features and prices in search of better options. Given the posh showroom atmosphere and the impressive conversations of the highly paid salespeople at the counter, we refrain from bargaining and looking for other means of comparison.  Always compare prices on websites and other stores and pay the best price while spending your hard-earned cash. Every penny saved earns an extra penny at the end of the day. 7. Create a passive or secondary income Besides your regular job, you work towards creating different streams of income. Look for opportunities, and try to create a passive income by renting your assets like an apartment or room. You can take up secondary income jobs if you have the time and your primary job allows it!  8. Teach your children to save early on Kids have no idea about how to save and how to earn money. Parents have to teach them and encourage the habit of saving from an early age. Make your children understand the value of money and how much effort it takes to earn it.  Give them monthly pocket money and teach them how to make the most of their money. Teach them to save a portion of it regularly. This habit will help them in the long run.  9. Be open about your finances with your family As they say, communication is the key. Parents should discuss finances with their children. This wouldn’t only make them aware but is good for their general knowledge. Maybe with that knowledge they can also plan their future. Don't leave them in the dark about financial assets built for their bright future. 10. Create a will to protect your family’s future India has Rs 82,000 crore in unclaimed assets. This money is spread across pensions, savings, mutual funds, stocks, government schemes, etc. All due to a lack of planning and foresight on the owner’s front. So be careful, make sure you have a legal will in case of any emergencies. Make sure your children and family members are aware of your savings, investments, and assets that can help them in the long run.  It might sound difficult to save money in a middle-class family, but following the above steps, proper planning, and execution can help you to achieve your financial goals. Saving in small amounts is easy; starting saving early and channelizing your savings could become a key to your successful financial freedom. Consult an expert advisor to get the right plan TALK TO AN EXPERT
Investment options for self-employed parents.

Investment options for self-employed parents.

Investing and saving is crucial for self-employed parents as they need to be vigilant in their efforts to provide a secure financial cushion for their children. A self-employed individual is self-dependent and thus responsible for the well-being of their business.  Whatever the economic health of self-employed parents, they need to create a continuous culture of investing in the right assets for future financial stability and growth.  There are several investment options for self-employed parents that will ensure desired wealth creation and keep their financial health safe and sound. Both short-term and long-term investments are important as the former will help in asset creation or a child’s education in the early years and the latter in post-retirement or higher education of children.  Investment options for self-employed 1. Fixed deposits Fixed deposits are good investment options offered by banks, NBFCs, and post offices at minimum risk.  A fixed sum is deposited as a one-time investment for a fixed tenure at a fixed interest rate. The banks are offering a current interest rate between 5% to 7.5%.  Investors can choose a normal FD which is taxable or a tax-saving fixed deposit, which saves taxes up to 1.5 lakhs under Section 80C of the Income Tax Act 1961.  2. Mutual funds Mutual funds are one of the best investment options for self-employed parents as they are structured and professionally managed. The investor does not have to spend time on research. Instead, several investors pool their money, and the fund manager reinvests this amount in several instruments like debt, equity or liquid assets, etc. The investor has the option of investing a lump sum amount in mutual funds or starting a SIP (systematic investment plan) if they want to opt for periodic investments.  A trustworthy app like Edufund gives access to 4000+ direct mutual funds to investors. The associated financial experts, with the help of a SIP calculator and scientific fund tracker, suggest the best funds and ensure better returns in the safest possible environment. It is also possible to invest in international mutual funds through the app and receive returns in dollars.  3. Real estate Real estate is a good investment option as the value is bound to increase and yield a good return with time. Purchase the factory or office space that you are using instead of renting because it is feasible to pay EMI rather than the rent. The self-employed individual can use the property to raise capital or for mortgages when needed. The aim of investing in real estate should not just be buying property instead getting a resale value if required. Additional read: Investment strategies in Volatile market 4. Government schemes The Government of India offers safe investment options with fixed returns under some of the government schemes.  PPF – PPF or the Personal Provident Fund, is a saving scheme where the investor invests annually or monthly for 15 years. It offers fixed returns and tax benefits to the investor. PMJJBY –Pradhan Mantri Jeevan Jyoti Bima Yojana is a life insurance scheme available to investors at a low cost. NPS – The National Pension Scheme is a safe and secure post-office scheme where investors deposit a fixed amount for a fixed interval.  Sovereign gold bond schemes – This government scheme is both a safe and high earner where the investor can invest in gold without owning the gold personally.  5. Shares and equities Shares and equities are investment options for self-employed parents who are ready to take a substantial risk with their investments. It is advisable to be careful in investments and take risks only on a predetermined permissible amount. Choose the shares and equities that will yield safe and highest possible returns.  6. US stocks and ETFs Self-employed parents can invest in US stocks and ETFs from India to create wealth. The Edufund App is a reliable means to create wealth because it allows investors to choose from 1400+ US ETFs and become a part of global companies like Google, Netflix, Apple, and Amazon. The simple and transparent app also helps in fractional investing, where investors can buy top shares that will yield a higher percentage of returns in dollars at zero brokerage.  7. Commodities Commodities in financial terms refer to oil, gas, silver, gold, grains, etc. investors interested in commodities have to invest in a futuristic price of the product. As the commodity market is inversely related to the stock market, it is often used by investors as a hedge against inflation and also against stock market risk.  Conclusion Choosing the right investment options for self-employed parents at the right age is a necessity as they do not have the luxury of a pension to manage expenses during later years. A well-defined financial plan and a diversified portfolio will prove a blessing as it provides significant accessibility and flexibility to tap into the savings when needed. Consult an expert advisor to get the right plan TALK TO AN EXPERT
How to raise a child and how much money do you need?

How to raise a child and how much money do you need?

Although nothing compares to the delight of having a child, raising a child, and giving him or her, it comes at a high cost. Parenting involves a significant financial commitment and emotional and physical investment. Raising a child in India is challenging and expensive. If you are wondering how much money does it take to raise a child in India? List of major expenses for child education plans 1. School expenses  Children's schooling and extracurricular activities take up a huge chunk of a parent’s annual income. Over 65% of parents spend at least half of their annual income on schooling. Every parent wants the best education for their child, even if it means that they occasionally struggle to make ends meet owing to escalating school costs.   A private school charges between 50,000 to 2 lakh rupees annually. In the 12 years between Classes I to XII, there would be an outlay of between 11 to 43 lakh rupees, assuming a 10% annual inflation rate for schooling. This fee is in addition to any tuition or extracurricular activities the child will enroll in.  2. College expenses  College expenses are a big part of how much money it takes to raise a child in India. Indian parents are most concerned about rising college costs, which constitute a major expense. The average cost of an engineering degree ranges from ₹12 to ₹15 lacs today; it will cost about ₹42 lacs to ₹50 lacs in around 15 years. In the same vein, it is reasonable to predict that in 15 years, a medical degree will cost more than one crore if it costs ₹30 to ₹40 lacs today. Although parents may choose to use student loans to pay for more expensive studies, the interest rate still remains high even after-tax exemptions. Top best child investment plans in India Read More 3. Miscellaneous expenses Miscellaneous expenses are important to consider when estimating exactly how much money it takes to raise a child in India. Up to the age of 18 are food, housing, and child care, but these are not the only costs to take into account. It can be expensive to purchase other basics like clothing, education, and healthcare. When calculating the costs of having and raising a kid, all of these categories should be taken into account as well.   According to a 2011 report by the Economic Times, the average cost of raising a child in India was ₹ 2.1 lacs. Healthcare costs are also increasing quite swiftly. The price of healthcare has increased steadily since that time by more than twice its previous level. Therefore, the typical health care expenses for raising a child will be between ₹ 4 to ₹ 5 lacs.  Food and other related costs, such as eating out, can range from ₹ 5000 to ₹ 6000 per person on average. Therefore, this could result in an additional ₹70,000 in expenses each year. As food prices rise, this will rise as well, therefore over the next 20 years, food may cost you ₹15 to ₹20 lacs.  Although this is changeable depending on your needs, an ordinary middle-class household that goes to the movies once a week and sometimes to a play or a weekend getaway should expect to pay roughly ₹ 4000 per person. A domestic holiday can run you roughly ₹ 30,000 per person, so your average annual entertainment price is between ₹70,000 to ₹ 80,000. All of these costs are based on current prices and do not account for inflation, so you will need to adjust your budget to account for inflation as you raise your child annually. When it comes to how much money does it take to raise a child in India? Then it can cost you from ₹65 to ₹80 lacs to raise a kid in India today. FAQ How much does a parent spend on a child in India?  Tier 1 city households may spend up to ₹43,000 on their children, but Tier 2 families spend nearly 23% less, Tier 3 families spend more than 22% less, and Tier 4 city parents spend roughly 32% less than Tier 1 city families. So, on an annual basis, Indian parents spend ₹32,000 on their children's education.  How much do you need to have a baby in India?  Given that infants are vulnerable to infections in their first few years of life, children need intensive medical care. Therefore, keeping that in mind, according to the reports of Aditya Birla Capital, the average cost of raising an infant would range from 5 to 6 lacks rupees which would include all the expenses from monthly pediatrician visits to accessories for a child. TALK TO AN EXPERT
Investment ideas for child education you need to consider

Investment ideas for child education you need to consider

What makes a good investment option? Many components could affect your investment decision, like liquidity, size of the investment, goal of investment, the horizon of investment, etc. Top 10 investment ideas for child education 1. Direct stock investment Passive investing may not be everyone's fit, as it is a risky type of asset with no certainty of profit. In addition, it is not only tricky to select the appropriate stock but also difficult to time your entry and exit. The only bright spot is that stocks have been able to outperform all other asset classes in terms of asset price returns for a long time. 2. Equity mutual funds Equity investors primarily invest in stocks. An equity mutual fund scheme should invest a minimum of 65% of its assets in equities and equity derivatives as per the Securities and Exchange Act of India (Sebi) Mutual Fund Rules. An investment company can be controlled directly or indirectly. 3. Debt mutual funds Debt mutual funds are suitable for low-risk or risk-averse investors. Bond/Debt funds generally invest in fixed-income asset classes such as government bonds, corporate debt, treasury bills (T-bills), as well as other alternative investments. The returns are easy to predict, and the investment does not face much volatility. 4. National pension scheme (NPS) The Pension Capital Market Development Authority administers the National Pension Scheme (NPS) and Long Term Investment Program for Pensioners (PFRDA). The annual payment required to keep the NPS Tier-1 fund active has been reduced from Rs 6,000 to Rs 1,000. It consists of a combination of stocks, certificates of deposit, debt securities, liquid money, and public money, among others. You can decide on how much risk you want to factor into your risk tolerance overall. 5. Public Provident Fund (PPF) Since PPFs have a maturity of 15 years, the effect of compounding tax-free interest is significant, especially in later years. In addition, since a state guarantee secures the returns and investing money, it is a safe investment. It is worth recalling that the government reviews the interest rate on the PPF every quarter. Additional read: Mutual funds for child education 6. Fixed Deposits with the bank (FDs) In India, a fixed deposit (FD) account is considered a better investment option than an equity or mutual fund. Effective February 4, 2020, every depositor in the bank is covered up to a total of 5 lakh rupees for both principal and interest as per the guidelines of the Bank Protection and Credit Guarantee Corporation (DICGC). 7. Senior citizens savings plan (SCSS) Senior Citizens' Saving Scheme (SCSS) is a government-backed pension scheme. Senior citizens resident in India can invest a lump sum in the scheme, individually or jointly, and access regular income along with tax benefits. Any person over 60 can apply for SCSS through a postal or commercial bank. SCSS has 5 periods which can be extended for another 3 years if the program develops. The total capital limit is Rs 15 lakh, and many accounts can be opened. SCSS money is taxed and billed on a fixed schedule. It should be mentioned that the property interest rate is subject to frequent reviews and adjustments. Additional read: Best sip plans for child education 8. Pradhan Mantri Vaya Vandana Yo PMVVY is a program for older adults age 65 and over that guarantees a 7.4% annual return. The scheme provides pension contributions which can usually be paid monthly, quarterly, or annually depending on the option chosen. The lowest pension payment is Rs 1000 per month, and the highest retirement payment is Rs 9250 every month. The plan allows a total investment of 15 lakhs. The program is valid for 10 years. The validity of program is valid until March 31, 2023. The invested amount will be returned to the elderly person when he becomes elderly. The amount will be issued to the applicant in the event of the death of the senior citizen. 9. Real Estate The place you live in is for personal use and would never be considered a business. If you don't really plan to live there, the family property you are buying can serve as an investment. The location is one of the most critical aspects in determining the value of a home, along with the rental income it can generate. Real estate investments provide profits in 2 directions: holding value and rental income. Besides, real estate investments are costly compared to other investment vehicles. Another significant risk is obtaining adequate regulatory approvals, which has largely been resolved since the arrival of the Real Estate Investment Authority. 10. Gold investment Owning gold in ornaments creates its own problems, including increased efficiency and lower costs. Then there are "production fees", which typically range from 6% to 14% of the gold price. People who want to get digital gold still have a better choice as these charges are not applicable to digital gold. Conclusion There are numerous investment options are available in the financial world. But which one suits your profile is the question. The equity mutual fund scheme as an asset class has outperformed all the other classes and if you want to invest in digital gold or mutual funds, but do not have any idea, how to choose the fund. Then, you can schedule a call with the EduFund advisory team. Consult an expert advisor to get the right plan TALK TO AN EXPERT
Ways to save for your child's MS in the US?

Ways to save for your child's MS in the US?

Trying to figure out the average cost of sending your child for MS to the US? The cost of studying MS in the US comes to a total of about ₹76 lakhs - 1.1 crores. The total cost of completing an MS in the United States is constituted of both tuition fees and living expenses. Overview of costs of studying MS in the US The cost of an MS in the United States for Indian students throughout the program, including expenses made in India and the United States, is detailed below: Factors/ParameterAmount (in INR)GRE₹17,000TOEFL₹15,000Applications₹70,000 - 1,20,000Other Expenses During Applications₹10,000 - 15,000VISA Fee₹13,100SEVIS Fee₹17,600Airfares (one-way)₹90,000 - 1,20,000Tuition Fee₹65,00,000 - 90,00,000Living Expenses₹9,00,000 - ₹20,00,000Total₹76 lakhs - 1.1 crores These figures were calculated using a variety of assumptions, and individual costs may change. We have just summarised a few significant costs to estimate the average cost of studying abroad, focusing on the price of an MS in the US. How to save for your child’s MS in the US Here are several financial planning techniques that parents can employ to lessen the stress and increase the productivity of their child's MS in the US. By following these guidelines, you can help your child achieve their goals while also safeguarding your long-term financial stability. 1. Think about long-term financial planning before you start An early start to planning is crucial. Plans for your child's international education should be started as soon as possible. As a parent, you may need to make some sacrifices right now, so start analyzing your spending habits and cutting back on unnecessary expenses. Regularly set aside funds for your child's education. Additionally, consider other saving and investment choices. You must account for the greater cost of living in the US and incorporate this element into your plan from the start. 2. Keep exchange rates and inflation in mind For many years, the US dollar has consistently ranked among the strongest currencies in the world, with nearly all other currencies gradually depreciating in comparison to it. You should expect that your currency will also experience this in the future. No matter when you plan to send your child to the US for education, you must factor in inflation in your country and potential currency depreciation in your budget. By taking inflation and exchange rates into account, the EduFund College Cost Calculator may assist you in determining the average total cost you will need to send your child to the US for MS. Longer periods provide you more freedom to invest in risky assets like stock, which might help you in the long term to fight off the effects of inflation and fluctuation in exchange rates. 3. Find the most suited investment options Even though your child's journey to the US won't happen for several years, you might not be able to meet all of your child's future expenses by merely setting up an education fund with your current regular pay. Future living expenses will undoubtedly rise from current levels. If you want to decrease the impact of these possibly higher costs, you need to start looking for additional sources of funding straight away that are separate from your (and your partner's) salary income. As a result, you ought to research potential medium and long-term investment options that you may start pursuing right away. Recognize your ability for risk-taking and adjust your investments accordingly. In your hunt for mutual fund-based Systematic Investment Plans (SIP), academic investments, or savings plans particularly created for your child's MS in the US, EduFund’s financial experts can help. 4. Consult a specialist before investing or studying abroad The process of getting ready for education abroad is scary to the majority of people. Even if you start early, create a budget and a costing plan, and research the various investment options, you could still feel entirely unprepared despite having an action plan and strategy in place. If you're having trouble, talking to a professional can be a smart idea. With the help of our investment advisors and study abroad specialists, you may examine your options and develop a more detailed and useful approach. You might even come across fresh options that you weren't aware of or hadn't thought of before. Conclusion The practical costs of sending your child to the US for a master's degree in science can be confusing, but with systematic planning and a realistic outlook, you and your child can both gain over time from pursuing this desired goal. EduFund’s financial experts are constantly available for any assistance or advice you need. Consult an expert advisor to get the right plan TALK TO AN EXPERT
How do you set financial goals?

How do you set financial goals?

If you want to become financially secure, it is extremely important to set short-term, mid-term, and long-term financial goals. Even if you plan everything, you cannot be fully prepared for a crisis that may come up anytime. The unexpected bills are the main reasons that affect our financial goals.   Ways to set financial goals 1. Establish a budget  Determining a particular amount of budget is the first and most important thing. You should have a clear idea of where you stand and how you can proceed forward. Money tends to slip through the cracks in the pockets of individuals. You can download an app that can track all of your expenses. Moreover, you need to have the information from all of your accounts in one single place so that you can conduct a proper analysis of the same.   In due course of time, you will realize that the small spending that you do in the canteen every day might add up to a considerable amount. Once you get an idea of how you spend, you will be able to track and save your expenses.  Create Smart Education Goals 2. Categorize your financial goals Proper categorization of your financial goals will help you target your orders. This should be the basic rule when you are proceeding toward your financial goals. It should be broadly divided into short-term, mid-term, and long-term financial goals. When you are setting up your long-term goal, you need to keep in mind all the targets that you have for the short term.   Start by listing all of your routine non-negotiable expenses that are involved. The amount that is left after all the expenses are over goes for investment. You have to make sure that you have set down the goals with an estimate of their costs. Make wise decisions when you are choosing different investment options. For this, you will have to figure out the amount that you need to keep aside monthly for investment. Additional read: Financial mistakes to avoid 3. Deadline for each goal When you have set the categories of different types of financial goals, start setting deadlines for each of them. Long-term financial planning should be followed religiously. There can be minor changes that can be made to short-term goals. Suppose you have a child who will start going to college by 2035, then you should start saving and investing accordingly with a deadline in mind. When the deadline arrives, you must be ready with the funds that will be required for your college education.   Next, if you plan to take a trip to your favorite luxurious destination, start saving and investing with a specific deadline that has to be followed at all costs. You can keep a tab on all the deadlines through a financial goals worksheet. It will also help you to analyze your dates from time to time. 4. Prioritizing all types of financial goals  With all the types of financial goals queued up, you need to start prioritizing all types of financial goals. If a situation of urgency is created, you would know which goal has to be prioritized first. Moreover, label each goal on your worksheet as need, critical, and want. This will create a distinct difference between the types of priorities that you keep for your finances. 5. Clear off your debts and build an emergency fund  Clearing off your debts will help a lot to streamline your entire financial planning. First and foremost, take a look at all of your existing debts. Make a proper plan for it and clear it off as soon as possible. Once that has been done, you can start creating your emergency fund. Your emergency fund should contain at least 12 to 24 months of your living expenses which will include your loan EMI as well. Make sure that you dip into your emergency fund only if it is extremely necessary. It can prove to be extremely counterproductive on your part if you set aside this fund completely. FAQs Why is setting financial goals important? Setting financial goals is crucial for achieving financial security and planning for unforeseen financial crises. How can I track my expenses effectively? You can track expenses by using budgeting apps that consolidate your accounts and analyze your spending patterns. Why should I categorize my financial goals? Categorizing goals into short-term, mid-term, and long-term helps you allocate resources efficiently and plan for each type of goal. How can I set deadlines for my financial goals? Establish deadlines by considering the nature of each goal and your specific target, ensuring timely savings and investments. Why is prioritizing financial goals important? Prioritization helps you identify which goals to focus on first, and labeling them as "need," "critical," or "want" clarifies their importance in your financial plan.
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