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Money Management for Newly Married Couple

Marriage is an life time and Important event of one's life. Marriage is Two individuals coming together to build life together. Both people may come from different background with different opinions, but they need to be in  liason with each other in all aspects especially Money.Marriage means sharing life goals, aspirations, commitments, assets and liabilities and finance.

Here are the few steps which will help the newly married couple to plan their money wisely:

Start Talking About Money:

It is always important to discuss about money with your new spouse as soon as possible after marriage. Everyone will have their own methods of spending, savings and investment. Now both must sync together for better money management.

Discuss Current Financial Situation:

Sit down together and discuss the current financial position. How much income both are earning? How much they can spend based on the spending habits?  Discuss about the personal debts they have together? How much they have saved and invested over the years? Be open and transparent with your spouse on money. Spend some time to discuss about desires, dreams and needs at the beginning stage itself.

Discuss about Financial Roles:

Clearly defining the financial roles among newly married couple will resolve lot of problems. "Who will be doing what" this should the point of discussion with the newly married couple. Think home is also similar to your career, you have to do the specific and Special tasks to achieve your goals and you have to tackle all the your obstacles. Know the strength and weeknesses of both and compare with eachother and assign tasks.

Note Down Your Life Goals:

For a newly married couple, Individuals goals will inturn become a common goal. Discuss with the spouse and jot down all goals. Like purchasing a house, Foreign Vacation, Retirement. Fund your goals together and review them periodically.

Converse about Bank Accounts:

Have separate account individually and Joint account together. Individual accounts can be used to get all credits like salary and Have a joint account to manage all your hold expenses and making Investments for your goals. Manage your money in effective way.

These things will make newly married couple to manage their money wisely.

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e-Insurance Account

e-Insurance account is more or less like a demat account, where one can store all the insurance policies (Life, Health, General ) in a single account in electronic form. e-Insurance account helps the individuals to hold multiple policy of different companies in single account, pay premiums, track of all policies in one place. e-Insurance account has to be opened with Insurance Repositories.

IRDAI has permitted following four entities to act as 'Insurance Repositories' that are authorized to open e-Insurance Accounts. Insurance Repositories will provide 13 digit unique eInsurance account number to individuals.

• NSDL Database Management Limited
• Central Insurance Repository Limited
• Karvy Insurance Repository Limited
• CAMS Repository Services Limited

Opening an e-Insurance Account:

Step 1: Download eInsurance Account opening form of your preferred Insurance Repository.

Step 2: Fill the form and attach self-attested copy of KYC documents.

Step 3: Submit the forms along with self-attested documents to your preferred insurance repository.

Benefits of e-Insurance Accounts:

•         One time Know Your Customer updation for all policies.
•          Storage of all policy in electronic format - Paperless Policies.
•          Safe against theft or loss of physical policies.
•          Consolidated insurance statement on an annual basis.
•          Single request for contact details updation
•          Premium alerts & payment for all insurers through eIA
•          Ease in registering bank account details for premium payment and payouts
•          One Time Claim Intimation in case of any unfortunate event

Once e-Insurance account is opened with any of the Insurance Repositories, All the new policies and Existing policies can be stored in electronic form.

Mentotax recommends to open e-Insurance account with any of the Insurance repositories and convert all the existing policies to electronic form for easy tracking and other benefits.

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Financial Lessons from Mom!

Financial Lessons from Mom!!

Mother's are the back bone of the family!! She is the pillar of support and decision maker!! Mother's are always awesome in budgeting and in teaching kids about money.

Few Financial Lesson we can learn from our mother.

* Creating Budget:
Moms are best at creating budget, she knows where to spend the money and where to cut the expenses on forehand and prepares the budget accordingly. She teaches us the best way to budget.

*Live with what we have:
Mom are best and can adjust to live with what they have without sacrificing the needs of family. They don't take loans or use credit cards for monthly expenses. We should learn from moms to live with what we have.

* Save for future:
Moms always see ahead. She plays key role in family expenses and helps in savings. She keeps aside some money from her house expenses for emergencies. She saves in her kitchen jars and piggy banks. She inculcates savings habits in kids.

* Setting Financial Goals:
Moms are best in setting financial goals and acheiving it. She knows what is required for family. She starts saving and investing for goals. She keeps her kids to involve in acheiving the financial goals.

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Transform your SIP to Top Up SIP

Transform your SIP to Top Up SIP:

Top Up SIP is a facility provided by the asset Management Company (AMC) where by investor can increase the SIP amount by fixed amount or by specified percentage at predetermined intervals. SIP is an effective tool to build wealth. Whereas Top Up SIP will enable to achieve your goals faster and accumulate wealth quicker.

Example: Deepan wishes to save for child marriage which is 20 years from now. He decides to start a SIP of Rs 5000 per month in equity funds. He has predicted that fund will give return upto 12% pa . He will be able to build a corpus of Rs 46 Lakhs after 20 years to achieve his goal.

If Deepan decides to Top Up his SIP Investment by 10% every year. He will be able to accumulate the same wealth in just 16 years. He can save 4 years by just Topping Up his existing SIP by 10%.

He will be invest Rs 5000 in first year, Rs 5500 in second year, Rs 6050 in the third year and so on.

If he is investing for 20 years with top up of 10% to his existing SIP. He can accumulate corpus of Rs 92.5 Lakhs by end of the term. He can build wealth almost double the corpus of simple SIP by topping up just 10%.

Advantages of Top Up SIP:

1) Helps to acheive the goals faster

2) Easy to manage the portfolio.

3) Helps to beat the inflation

4) Helps to Increase the Savings

5) Adopts to your rising income

Mentotax recommends you to Top Up your existing SIP by at least 10% every year to achieve your goals faster and enjoy the power of Compounding.

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Overnight Funds

Overnight Funds are the debt funds that invest in bonds, money market instruments that mature in one day. Overnight Funds are introduced under debt funds by SEBI in new categorisation of mutual funds. Overnight Funds are the best avenue for parking your idle money, where investor can earn better returns with low risk or with even no risk.

Overnight Funds invest collateralised borrowings and lending obligation (CBLO), bonds, repo, corporate bond repo, short term borrowings backed by government, money market instruments like treasury bills, CD, CP with one day maturity. When securities mature, fund reinvestment the proceeds in next set of one day instruments. At the beginning of everyday, overnight mutual fund will have new portfolio.

Returns from the overnight for will reflect the overnight lending and borrowings rates in the market. Investor can purchase the units of overnight funds in previous day NAV if invested before 1PM of the day. Overnight funds doesn't carry any service tax, transaction tax, brokerage etc.

Mentotax recommends to utilise Overnight Funds to park your Emergency corpus with very merger risk and to invest your idle money to earn better returns even for one day.

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How to select financial advisor?

How to select financial advisor?

Financial advisors play a pivotal role in investment and financial journey of individuals. They help in acheiving life goals of the person by selecting accurate product based on the risk profile. Choosing a best financial advisor can change your finances. Financial advisors suggest you how to best save, invest, and grow your money.

Mentotax suggests you look for a professional with the following certifications. Financial advisors may have different certifications and experience but the following are considered to be best in the industry.

AMFI Registered Mutual Fund Advisors: Assocoation of Mutual fund in india in order to promote best practices and ethical standards in the business of sale of Mutual Fund scheme has formulated  guidelines to financial advisors. These code of conduct and best practices ensure high standards of services to investors. AMFI Registered mutual fund advisor is qualified person to distribute mutual funds.

SEBI Registered Investment Advisor (RIA): Market Regulator -Securities and Exchange Board of India (SEBI) has taken various steps to segregate distribution and advice. SEB has rolled out with Investment Advisers Regulations in 2013. RIA registered with SEBI is compensated only through the fee paid by the investor. This ensures that the RIA protects the interest of the investors. Financial Advisor needs to complete any certification prescribed by SEBI to register as RIA.

CFP (FPSB): Certified Financial Planner Certification is granted to individuals who meet the stringent standards of education, examination, experience and ethics set by FPSB India. FPSB India is the principal licensing body that awards CFP Certifications. CFP (Certified Financial Planner) is generally considered the gold standard in the industry.

Mentotax recommends to choose your financial advisor with these professional qualifications and select wisely for financial independence.

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