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Breaking Stereotypes: The Future Of Finance And Tech Is (And Will Be) Women

Work culture in organizations is gradually moving towards diversification and inclusion. The current times are witnessing gender stereotypes bring identified and shattered in the wake of gender sensitization and diversity. Organizations across the globe are making concerted efforts towards the goal of equality of opportunity. Still, equality at workplaces is a far fetched dream. Take for instance the case of the US, where: 

Yet they earn lower salaries and fill up fewer seats in male-dominated professions like technology and finance. Fortunately, these stereotypes – those of women typically avoiding math, science and often all things logic – are on the verge of shattering.

A study conducted by the global research organization Catalyst stated that among Fortune 500 companies, the companies which had the highest number of women directors on board have shown better financial results and those having at least three women on their board have stronger-than-average results.

Gender Stereotyping deeply impacts the psyche and confidence of the female workforce. As per research, by the age of 6 years stereotypes regarding intellectual ability take root in girls. Girls identify themselves less with STEM subjects (Science, Technology, Engineering, and Mathematics). At the workplace, women find a less conducive environment to hold leadership and skill-based jobs, share their ideas in discussions concerning these subjects. 

Indian Scenario: Tech

The current Indian scene has begun a positive, and hopefully soon – pretty picture: 

  • Women representation in corporate jobs has increased from 21% to 30% in a span of five years, as posted in  Zinnov-Intel Gender Diversity Study 2019
  • Females are represented higher in non-technical roles at 31%, while in technical roles their share is 26%. 
  • Only 11% of the C-suite positions are held by the women, they were represented at  20% in mid-roles and 38% in junior roles. 
Women's Day

If these stats are compared with the global figures, Indians are surely taking strides in leaps and bounds to cut across cultural misfits and gender Stereotyping issues. As per a NASSCOM study of IT professionals and middle management from companies of Europe and India, 35% of the people with specialist technology roles are women in India as compared to a mere 17% female representation in Europe. 

Several organizations like Oxfam India through its campaign Bano Nayi Soch are all in for progressive ideas that subvert the norms of patriarchy.   

In 2016, Facebook initiated recruitment practices focused on bringing in black and female workers into their workforce – in who now make up 36% of its workforce. Sheryl Sandberg, COO of Facebook and the only woman on their board posits the concept of ‘leaning in’ in her recent book as the idea of being ambitious in any pursuit.  

Kiran Mazumdar Shaw, the CEO of Biocon and the first woman billionaire entrepreneur, reiterates that there is no dearth of talent in meritorious women and even though a small minority, they are well respected and worthy of inclusion. 

Indian scene: Finance

Women are considered excellent investors, but female representation in the finance sector remains meager. A CFA Institute Gender in Investment Management study shows a mere 11% representation of women investment professionals in the industry.  Research across the globe has proved how a culturally rich and diverse workforce delivers optimum results and lower risks for investors. Experts cite several pros of getting the women included in the workforce. 

  • Firstly, female inclusion will tend to bring in newer perspectives into the industry that can usher in a new revolution in the industry. Quality of output and decisions will definitely see improvements. 
  • Gender diversity can lead to innovations and rethinking of the old investment strategies that are sure to impact investment outcomes. 

Several initiatives have been taken to improve the involvement of the females at all levels. For instance, Young Women in Investment, India’s first initiative seeks to create female awareness and interest in the investment management industry. The initiative focuses on presenting investment as a long term viable career option to the women. The success and support of this initiative have definitely paved the way for the inclusion of females in the future of finance. 

Initiatives to Break Stereotypes

While we’re doing well, there can be several initiatives that can make the future of tech and finance into a substantial female-centric arena: 

  • Tech can be leveraged to advance gender parity and women empowerment in a number of ways. The development of the gig economy is offering a contingent workforce that is sure to lessen such gaps in the future. 
  • Unlearning the biases in our mindset and doing away with gender stereotypes will be a daunting task that would demand our attention towards sustainable and all-inclusive economic growth. 
  • A survey conducted by Unilever showed that 77% of men and 55% of women felt that men are best suited for high-stake projects. Such views deeply impact gender parity issues. Marketers and media need to stop the sexist portrayal of women. 
  • Social, political and cultural fronts should take it upon themselves to curb these formative practices of stereotyping and expose both the genders to all kinds of non-traditional fields like tech or finance to let them make their decisions rationally. 
  • There is a dire need to bridge the skill gap among women by taking advantage of digitization and tech innovations. The global “talent shortage” is currently at 38%, with the top ten hardest jobs to fill in STEM professions. The focus has to shift to building competencies and skillsets among women. 
  • Another key area of concern is the online representation of women. There are 250 million fewer females present online as compared to males. Connecting and bringing greater access to regions with no internet can bring about unforeseen opportunities and can even act as catalysts synthesizing women’s inclusion in tech and finance. 

The instilling of the right temperament among the youth holds prime importance as the majority of them make their career choices by the age of 26 as per a survey. Women do not lack in tech or finance skills and knowledge, what they lack is the proper nurturing environment enabling them to fulfill their dreams sans any bias or stereotyping. Once the institutions of today get in sync with gender equality and diversity themes, the potential and opportunities awaiting women in tech and finance can be attained.
And we can surely hope for a feminine era in finance and technology awaiting us in the near future. 

“You are fierce, bold and daring! Also, the best when it comes to caring.”
Happy Women’s Day!

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Spouse In The Same Office: A Closer Look At The Implications for HR

Compiled By: Sandeep Raghunath
About Sandeep: He is the Head of Human Resources at EarlySalary, with 10+ years of international experience in HR across industries.

It is perfectly natural for a professional to fall for another if they’re working in the same office, or are spending a significant amount of time together. Open and vulnerable conversations are fairly likely to occur, and the more familiar they become with each other, the more potential there is for mutual attraction. While they may be frowned upon, relationships within an office setting are far from uncommon. Some partners even often end up getting married. 

In this context, however, the HR function isn’t expected to remain out of the loop. Organizational policies, cultural sensitivities, etc – there are many factors influencing the HR functions’ role in managing professionals with a spouse in the same office. How can they approach this? Let’s look at some important aspects.

Disclosure of relationship

It is vital to maintain an environment where it is known that keeping a relationship or marriage secret is not in the interest of the company and can have larger implications. According to Sarah Churchman, head of diversity and inclusion and employee well being at PwC, the only way to manage relationships is for the couple to be totally out in the open. “If they don’t inform us, someone else in the department will. Not because they are necessarily behaving in an inappropriate manner, but simply because they may fear a problem with favoritism.”

Some enterprises have a policy in place allowing for managers to be demoted, transferred or even dismissed in the case of the manager being in a relationship with their direct report without disclosing the same. It is, therefore, essential that an office couple is made to sign out a disclosure form with the HR Department. This allows for a line of communication between the office and the parties involved and also serves as a formal notice of their relationship. It also prevents misinformation and rumor-mongering in the workspace which hampers productivity. 

Different organizations have varying HR policies on how they deal with a spouse at the same office. If a company is strictly against work relationships, one of the spouses can be dismissed, though it would not be a popular move and discourage transparency. “You can’t legislate against office romances or indeed falling in love, and an outright ban would be totally unworkable,” says Churchman.

It is imperative for a company to have a policy on office relationships and furthermore ensure that all employees, especially spouses, get familiar with these and abide by them at all times during work hours. This includes coffee breaks, lunch breaks, business trips, etc.

Personal life and Professional life

The need to maintain a professional relationship between spouses in the same office space is vital. Often, the hardest battle in managing office relationships is inculcating the need to strike a balance between personal life and professional life. According to a research “on flirting at work” conducted by Amy Nicole Baker, an associate professor of psychology in University of New Haven, and an author on workplace romance papers, it was found that people who frequently witness other colleagues flirting often feel less valued by the company and have a decline in job satisfaction. This feeling of discomfort can also lead to many quitting their jobs. In order to prevent others from being uncomfortable and thus putting oneself under the radar. 

Spouse In The Same Office: A Closer Look At The Implications for HR
“Open and vulnerable conversations are fairly likely to occur, and the more familiar they become with each other, the more potential there is for mutual attraction”

Public displays of affection and flirtatious conversations can disrupt the working of the office and reek of unprofessionalism. It is essential to treat your spouse like a regular colleague within office hours and even in work parties, off-sites and other such events which are an extension to the office workspace.

Senior-Junior Relationship

In the case of a senior and subordinate getting married, the need for professionalism is critical in order to prevent conflict of interest. According to most office guidelines – it is necessary for the senior spouse not to be involved in the appraisal or evaluation of their partner. The two must not work together in the same department in order to curb the space for favoritism and nepotism within the workspace. There is also a potential threat to the security of confidential client information and the risk of information leaks.

To avoid the occurrence of favoritism, one spouse should be transferred to another department, and ideally, no couples should work together in the same department.

Divorce

The unfortunate scenario of a married couple splitting up can have deep repercussions on their work ethic, their behavior in the office as well as the office environment itself. The disclosure form should specify what would happen to both the parties in case of this occurrence. The way two ex-partners are treated in the office also deserves attention. They might act in a more isolated nature and may be unable to maintain good performance. This situation is a nursing ground for potential blame-game and office politics. This difficult period of the employees’ life should be battled with care and acceptance. They might not need advice and might need someone to listen to them in order to clear their mind and concentrate during work hours. In case of poor performance, they should be nudged towards the direction of working better and given gentle reminders instead of indifferent statements like “Your divorce is not our problem.”
Perhaps an Employee Assistance Program to help deal with such traumatic instances is worthy of consideration from employers.

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Can Millennial Stress be Resolved by Financial Wellness?

Stress is an issue bigger than ever for millennials, who are rushing ahead with their worklife, finding little time to enjoy the intricacies of life. They are not only toiling themselves with projects, preparing reports and meeting targets, but also when off the work they busy themselves worrying about their debt, savings and expenditure.  India has been, off late, a very volatile economy with companies shutting down production and filtering out chunks of employees. As such millennials are forcing themselves to work in return for poorly paid salaries and unsatisfactory job environments. In most of the cases, they are not able to manage their day-to-day expenses and have to revert to debt; while in other cases are confused about their financial course.

A whopping 76% of Millennials say they are experiencing financial stress, up 23 percentage points from 2018, according to the PwC 2019 Employee Financial Wellness Survey.

Financial stress is the top contributor in affecting employee health and morale followed by their jobs and relationships. Matching your salary with your expenses is only the tip of the iceberg, when cash flow and debt issues add to the worries. Employees are worried that they are not able to save enough and will face or are facing a financial crunch. Let’s look at the major issues hounding today’s millennials in terms of finance:

Past concerns  

With higher education becoming more expensive each year, an increasing number of new employees enter the corporate sector already laden with the burden of huge debt in the form of education loans or personal loans. As per Workplace benefits report 2017, 40% of millennials say that they left high school and college unprepared for the real world. As such they look upon their employers for the necessary guidance and help related to a majority of topics around financial wellness. 18% of millennials want more help with their student loans.

In some cases, these debts may be gifted down from one generation to another. A son may have to pay off a home loan or some other debt incurred by his father. These circumstances dilute the finances and millennials find it difficult to lay away the stress.

Present concerns

According to the 2017 Workplace Benefits Report, a significant number of Millennials say they feel unprepared to manage their finances and need help with topics across the financial wellness spectrum, including saving for retirement (43 percent), general savings help (40 percent), paying down or managing debt (34 percent), saving for major expenses (36 percent) and budgeting (31 percent). 

Peer pressure, maintaining the status quo and lavish lifestyles often lead millennials to the brink of a financial crisis if they do not plan their finances well in advance. Many are highly ignorant about how to proceed with investments; banks or mutual funds, long term or short term, commodity or shares, and a lot more. About 43% feel that they require more help with investing, 40% wanting more information on how to save taxes and 21% feel that they want to save more. It’s an additional issue when they require funds in a lump sum for unforeseen expenditure or a major purchase. They either trap themselves in instalments or else fall in a debt trap. 63% of Millennials consistently carry balances on their credit cards and two out of five have trouble making minimum monthly credit card payments.

Future Concerns

Besides provident fund schemes, gratuity and a few other benefits, employees aren’t assured adequately about their future. They remain concerned about their retirement and pension, their children’s education, medical expenses and a lot more. Pension schemes are offered by insurance firms, but which one is best suited remains a matter of concern. Career opportunities and growth also impact future and present decision making. Not surprising then that employees, especially millennials, find themselves to be dependent on their employers.

Why should employers take up financial wellness programmes?

Financial stress not only impacts an employee on a personal level, but his working capabilities and mental faculties get impacted too. Stress can be behind severe health concerns that may lead to employee absenteeism, employee turnover, and dissatisfaction. The issue of financial health becomes of utmost importance to keep the solubility of the firm intact on one hand and to achieve common organisational goals on the other. As per a survey, an employee spends 12 hours on an average each month stressing about their finances. 

Bank of America Merrill Lynch report says that the lack of confidence in financial matters affects Millennials’ workplace behavior. On average, employees spend 3 work hours each week (12 hours per month) dealing with financial stressors.

A well thought of and structured wellness programme may act as a tonic for the employees’ financial health:

#1 Making an in depth study of employee concerns before finalising on the mode the financial programme is critical. Not everyone shares the same crisis, and not everyone will desire third party approvals or advice before taking decisions. A financial assessment is essential before you initiate the program and want it to succeed. This can be an eyeopener for those employees who may have been unaware of the causes of their financial stress and will make them ready to adopt the new financial course.

#2 Educating employees about financial health and other resources should be taken care of as well. This can be one through seminars, online courses, or even lectures and classes conducted by an expert or professional.

#3 The employees must be educated on healthcare costs as well. It doesn’t hurt to take this opportunity to promote healthier lifestyles as well. This can save them a lot in the long run. Group insurance schemes and health insurance schemes should be encouraged as a norm in the organisation.

#4 Financial debt management, especially the management of student loans, is another area of focus. Employers, if possible, could even consider taking it upon themselves to sort out the education loan or debt of the employees as a gesture of goodwill. This can be offered as an employee benefit as well. Executed right, the company can go a long way in earning the reputation of being the best in class when it comes to their employees’ welfare.

#5 Then comes the basic question of managing the current expenses such as installments, deductibles, premiums and other expenses. There are several paradigms involved in financial planning and it can be overwhelming for a millennial who has just been placed on his job.

Encouraging employees to take part in these programmes and letting them get involved through participation, and one on one discussion will assist them in reducing their financial stress. The overall focus of the employee can shift to organisational task boosting his productivity and overall efficiency. At the individual level, it will boost their confidence to manage their current expenses and plan for their future expenses in advance. Financial wellness programmes can, therefore, help in improving employee health and quality of life. A healthy and financially sound human resource can be an unending source of profitability and efficiency for any enterprise.

Bank Overdraft versus Personal Loan Apps

Both businesses and individuals often require credit. And this need has traditionally been fulfilled by banks (and their overdraft facilities) and large, established institutions. But thanks to advancements in several areas – technology, a rising startup ecosystem, and even market demand, short-term credit via loan apps have gained much popularity in addition to traditional methods such as bank overdrafts. With multiple credit options available, the answer to which one is the best amongst them would simply depend upon the requirements and preferences of the customer.

A bank overdraft is essentially a credit extension from a financial institution that enables account holders to withdraw money even when the funds available in the bank account are insufficient or at zero balance. It typically works like a loan. 

On the other hand, loan apps, such as EarlySalary, provide instant credit to customers via an online application process.

Here’s a closer look at the finer differences between the two.

#1 Who can avail?

A bank overdraft facility can be availed by account holders who meet certain eligibility criteria that are determined by the bank, such as creditworthiness and the type of collateral. Overdrafts can be available against fixed deposits, salary, shares, bonds, property, or traditional insurance policies. 

However, there are many customers whose credit scores may be insufficient to guarantee them access to bank overdrafts or other traditional credit options. This is where the digital credit ecosystem, with its features such as loan apps, has been making its footprint. Loan apps such as EarlySalary offer easy access to instant credit for salaried employees. Therefore, credit via loan apps can be availed by a wider range of people as compared to a bank overdraft.

#2 Withdrawal Limits

For bank overdrafts, the withdrawal limits are set by the lending institution based on the creditworthiness of the account holder. This may vary from person to person. Loan apps too can have different withdrawal limits. EarlySalary, for instance, allows customers a flexible loan amount starting from Rs. 8,000 up to a limit of Rs. 5,00,000. Therefore, while the withdrawal limits can often vary, bank overdrafts can generally offer greater limits if the eligibility criteria are satisfied.

#3 Charges

Bank overdrafts seem to have a certain advantage when it comes to charges. There are no pre-closure charges and the customers are required to pay interest charges for the time and amount that they use. 

However, there is a demerit to this – if the customer crosses an agreed limit, then they could risk high costs. Moreover, defaults would spoil the customer’s credit score. In this regard, loan apps can often have interest rates or fees that are a bit on the higher side. EarlySalary, however, does not have any prepayment charges and offers attractive interest rates.

#4 Speed

Being a traditional finance method, the application and approval process for getting a bank overdraft may be slightly longer as compared to loan apps which have a very short, online application process that requires minimal documentation. At EarlySalary, you can get an instant loan in 10 minutes.

bank overdrafts, loan apps

Bank Overdraft vs Instant Loan Apps: Which One Should You Pick?

It is evident that the right option for availing of credit would be the one that better suits your needs. Someone with a stable salaried job and a good credit score may prefer a bank overdraft while someone who does not have a good credit score would have to go for loan apps. Moreover, if you need instant credit without hassles, loan apps offer an easier online application process with quick approval. 

One could say that the loan app is largely targeted at salaried millennials who may be looking for salary advances as alternatives to bank loans. All the same, it is always imperative to do one’s research and evaluate one’s needs while seeking credit. If you are clear about your requirements, the choice between loan apps and bank overdraft can be quite obvious. 

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Investment‌ ‌Advice‌ ‌for‌ ‌ Millennials:‌ ‌The‌ ‌Whats,‌ ‌ The‌ ‌Whys‌ ‌, And‌ ‌The‌ ‌Hows‌

According to a report on Millennials, by Morgan Stanley Capital International (MSCI), on a global level, millennials represent around 23% of the world population. millennials have a wide range of access to and knowledge of recent technologies, along with a fair idea of the investment options open to them. Even then, it is a tactful task to know where to invest, how much to invest, and which investment options would be the best suited for them. This post is aimed at providing investment advice to new investors, addressing the whats, the whys, and the hows of investing as a millennial. But first, let’s address some fundamental questions:

Why Should A Millennial Invest?

Millennials are likely to feel that they don’t have adequate knowledge about the market, or that it is out of their capacity to invest and take risks. As a millennial, if you’re still indecisive about investing, here are a few reasons why you should consider investing.

  1. Time Is On Your Side – A great advantage that millennials have is that they have a good amount of time to accumulate wealth. Millennials can maximize their returns through compounding, a process to potentially boost your savings, by investing in the market over a long period of time.
  2. Put Your Money To Work – As a millennial, if you keep a mindset of letting your money stay stacked up in a bank, it will slowly lose its value due to inflation. In contrast, if you invest, you can get returns, thus achieving your financial goal faster.
  3. Save Money On Tax – You can get certain tax advantages from some investment accounts, like an Equity Linked Savings Scheme, or a PPF. Your contribution there reduces your annual taxes.
Investment Advice
Source: Reliance Securities

What Should A Millennial Keep In Mind Before Investing?

Investment can be a tricky task for someone just starting out. Therefore, it is essential to know all the aspects involved in investing your money. As a millennial, here are five investment advice to keep in mind before jumping in:

  1. Plan Before Investing – It is crucial to know what the primary reasons are for you to start investing. Are you just trying it out with a small amount of capital? In this case, you can afford to have a larger risk appetite. You will need to be much more thoughtful about where you invest if you’re pouring your life savings into it. 
    However, with this sorted, you will find it easier to decide how much to invest and which investment options to select. To help you with this, you can also approach a financial advisor.
  2. Take Calculated Risks – You have to keep in mind that, to move forward, you will have to take risks. Hence, to reach your financial goals, do not back down from taking certain calculated risks. However, these should not be risks that will put you in a precarious financial situation if things go south. 
  3. Choose Investment Options That Suit You – While you are narrowing down on investment avenues, you should level your expectations with the projected returns of the investment scheme. You can consult a financial advisor to provide you with in-depth investment advice, like choosing a particular investment option from a wide range like investing in mutual funds, stocks, public provident fund (PPF), retirement plans etc. 
  4. Design Goal Oriented Investments – If you are focusing on achieving immediate, short-term, or smaller financial goals, then your choice should be to invest in short-term funds or schemes. On the other hand, if you are planning on achieving larger and far-reaching goals, you need to beat inflation by making long-term investments.
  5. Avoid Debt-trap – As a general trend, millennials are drawn to quick success without much thought to the probable drawback of that. Since investments are a quick way to financial success, therefore millennials tend to fall into debt to invest in schemes. 
Investment Advice

How Can Millennials Invest Their Wealth

Amongst millennials, there is a trend of diversifying in several avenues. If you are a millennial, the best investment advice for you will be to invest in equity, retirement funds, mutual funds and insurance, and public provident funds. Here is a more detailed explanation of the available options.

  1. Equity/Stocks – In the long run, if you want to make investments seeking high returns, you cannot ignore the stock markets. Older millennials usually make higher direct equity investments. The richer millennials invest nearly double that, as higher income levels provide a cushioning that enables people to take a greater risk. However, this option has the greatest risk.
  2. Mutual Funds – One of the favorite investment options of millennials, irrespective of their income bracket or age, are mutual funds. The reason for this is the organized management, the ease of investment, and the availability of several funds. Most choose to commence their mutual fund journey in tax-free investments like an Equity Linked Savings Scheme (ELSS). This category is best for long-term investments.
  3. Insurance And Retirement Plans – If as a millennial, any of your concerns revolve around advancing age and the pitfalls related to it, then the best option for you is insurance and retirement plans. You can subscribe to a suitable life insurance plan, which can also act as a financial safety net for the members of your family. Along with that, it is also beneficial in saving money on taxes by investing in insurance.
  4. Public Provident Fund – PPF is one option a lot of millennials consider. PPF has a tenure of 15 years, which is beneficial for millennials because they have a considerable amount of time in their hands. Furthermore, because the interest acquired and the principal invested is supported by a sovereign guarantee, this makes PPF a safe investment.

Conclusion

As a baseline, even though investments need to be made carefully, a millennial should open up to investing their wealth in mutual funds, retirement, and insurance plans or equity because they will get higher returns than just a savings account, and consequently save on taxes. Millennials should start early so that they can utilize the time in a planned way. For more on how to start (and maintain) your financial journey, head over to the EarlySalary blog.

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How to Save and Plan for Your Child’s Education: A Guide

Education opens up more opportunities than any other investment ever well, as many doting parents would agree. Getting the best education indeed opens doors with no other keys. Oprah Winfrey has rightly said, “Education is the key to unlocking the world, a passport to freedom.” Parents wish the best for their children, and education tops that list. Children can be molded into their best versions through education.

Steps to save and invest for your child’s future

One must ensure that one is financially prepared to enhance their child’s possibility of getting the best possible education. If the plans are made in an orderly manner and in advance, chances are that your child’s dreams and ambitions wouldn’t be compromised.

  • The decision on time horizon: A child’s education should be considered as a long-term goal. The earlier it’s planned, the better results it will fetch. Anticipate the total time period of your child’s education from the present time, let’s say another 20 years of education. This will allow you to decide and save the right kind of funds which will suffice enough to provide the best to the child.
  • Cost estimation: Inflation is at a high and is rising every year. The costs differ from location to location, but it is undoubtedly higher in metro cities than non-metros. Further, private schools are seen to be quite expensive in comparison to public schools. In 2018, premier B-schools increased fees to Rs. 21 lakh for their two-year flagship courses, which was worth Rs. 6 lakh in 2008 i.e., average inflation of 13%. The prices of prestigious foreign universities are soaring high while school education is taking up a massive chunk of parents’ income. Further, it’s not just the fees of the educational institutes, but also involves other related expenses like accommodation, costs of material required, transportation, medical expenditure, etc. too.
  • Assessing your financial position: Understand and assess your current financial status. This will help you in planning better and saving adequately for your child’s education. This will also help in understanding how much to be saved to start your fund. Analyze your present investments considering future benefits. Savings can be done systematically by keeping a certain amount aside regularly.
  • Planning the investments: Asset allocation schemes are the best way to invest. Since your financial position and potential are already mapped, you can make better investment decisions. Investment should be made in funds that can counter inflation and also fulfill your needs. If you start early, the amount invested can be less. The strategy should keep on changing every few years with your child growing up. SIPs can be increased in bits to reduce investment. Avoid low return investments.
Child education, future, planning, guide
  • Insure yourself: Insurance should be considered as protection first and then as an investment. In case of an untimely demise, insurance will keep the family and your child’s education plans afloat. The life cover should be a good percentage of your current income. Optimally insure for not just life, but also for the health of all the family members, which has become so necessary in the current times of the pandemic.

Final Action

Prepare for the unexpected. Nobody has foreseen the future, but you can secure your and your child’s education by taking corrective actions right now with a holistic approach. EarlySalary enables paying your child’s school fees through EMIs with a credit limit of up to Rs. 5 lakhs. It is easy to use, has flexible repayments, and is one of the country’s leading education programs. School FeES – EarlySalary is designed to streamline the fee deposit process in schools easing the parents. With real-time onboarding and disbursal, EarlySalary is the way to go!

Child education, future, planning, guide

Of course, children’s education is crucial, and money shouldn’t be a deterrent. Every child is unique, and so is their dream!

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Low CIBIL Score? Here’s how you can get a Personal Loan anyway

Today, we rely heavily on loans from financial institutions to enable our goals and aspirations in becoming a reality – be it in the case of a wedding, an exotic travel plan (okay, not in 2020), or even buying a house or a car. And it’s these aspirations that often remind us of the criticality of our CIBIL score, or credit score. Like it or not, our understanding of how the CIBIl score works are crucial if we desire the process of taking a personal loan to be made easier.

So what exactly is a CIBIL score?

A CIBIL score can essentially be understood as a 3 digit numeric representation of your creditworthiness, ranging from 300 to 900 (check your credit score here). With the promulgation of the Credit Companies (Regulations) Act in the year 2005, 4 specialized agencies were created to assess each and every borrower based on all their credit activities in the past and assign them a credit score. As of now, there are 4 such institutions in India out of which the most heavily relied upon and popular one is the Credit Information Bureau (India) Limited (now changed to TransUnion CIBIL Limited), popularly known as CIBIL or Credit Bureau. 

A CIBIL score, plainly speaking, is based upon all the individual’s credit payment history across every type of loan by every kind of financial institution. However, it does not take into account any individual savings or investments. 

How is the CIBIL score associated with availing of personal loans? 

To prevent any banking frauds and to ensure repayment of loans by the borrowers, by the promulgation of Credit Companies (Regulations) Act in 2005, the government gave importance to individuals’ credit history. Further, the RBI has issued guidelines to the effect that no loan or other forms of credit should be given without evaluation of the individual’s CIBIL score. 

The closer your CIBIL score is to 900, the easier it becomes to avail a personal loan as it signifies your credibility as a borrower. Conversely, a low CIBIL score signifies poor money management, chances of loan repayment default, or a general position of unreliability as a borrower. In the case of a personal loan, the CIBIL score plays a pivotal role as it helps in the approval of the loan and plays a major role in determining the interest rate and period of repayment, among other things.  It is, however, possible to improve your credit score.

To know what your CIBIL score says about you, read our earlier blog here

Factors which affect the CIBIL Score 

Several factors affect your CIBIL score, which consequently affects your chances of availing a personal loan. The factors include:

  • Previous delay in repayment of the loan 
  • Loan default
  • Pending credit card bills 
  • Multiple applications for credit in the form of loans or credit cards 
  • More reliance on unsecured loans 

These are just a few of the factors which can affect your CIBIL score. To know more, take a look at this post on factors affecting your CIBIL score.

CIBIL score, personal loan, credit score

Alternative Sources to get Personal Loans Without a Credit Score

If you have a low CIBIL score or do not have a CIBIL score at all due to being new to the credit market, fret not because it is still possible for you to avail a personal loan. With the advancement in the fintech sector, there are several ways by which you can avail a loan with a CIBIL score as well. They include:

  • Take evidence of your present sources of income 

Since the bank’s main concern is whether or not will an individual be able to repay the loan they are borrowing, it is advised that you take all the financial statements related to all of your sources of income. This will ensure the banks of your capacity to repay the loan despite a low CIBIL score and, therefore, may lead to your personal loan application’s approval. 

  • Move a joint application or apply with a guarantor 

Even if your individual CIBIL score is low, your loan application can be approved in case you get a reliable and credible guarantor or joint applicant. This gives banks some sense of assurance concerning the repayment, and hence the approval of the personal loan can become easier. 

  • Do not move multiple applications 

In a frenzied fit, do not apply at multiple banks for the loan as the same reflects poorly on your CIBIL score. Also, try not to resort to personal loans at the drop of your hat, as the same can be detrimental to your CIBIL score in case of default or rejection of the application. 

  • Take steps to improve your CIBIL score 

Having a good CIBIL score can go a long way in helping you secure easier and cheaper personal loans. It does not have to be any drastic step, but even small changes can help improve your score. Some things you can do, for instance, is don’t change your credit card frequently or to keep reviewing your CIBIL report periodically for inaccuracies. To know more about how to improve your CIBIL score in 5 easy steps, refer to our earlier blog here.

  • Take a loan from a Non-financial Banking company 

Taking a loan from an NFBC is much simpler than taking it from a commercial bank. A lot of NBFC have no paperwork and instant personal loan disbursement and do not even have to take into account the CIBIL score.  For instance, EarlySalary offers instant personal loan disbursement upto 5 lacs directly into your account. It does not even take into account your CIBIL score. 

Where are you heading for loans?

At EarlySalary, we are aimed at meeting all your financial requirements with simply a click. Despite having no or low CIBIL score, the process of availing of a personal loan is easy, fast, and paperless. To know how to get a personal loan in less than 5 minutes, click here.
The eligibility criteria for the loan are also reasonably simple. So, to know more, click here and get an instant personal loan at the drop of your hat.  

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Fulfill Your Wedding Dream With EarlySalary’s Wedding Loan

Wedding season is around the corner, and no one does weddings better than we Indians do with the whole “big fat Indian wedding” – a larger than life setup, designer outfits, extensive guest list, and a never-ending food menu. Since weddings are arguably one of the most memorable days for the bride and the groom and their near and dear ones, it deserves to be celebrated on a grand scale, fulfilling the couple’s lifelong dreams. 

At the outset, planning a wedding may seem like a simple affair, but it is a herculean task, in reality. A costly one at that in today’s times. Gone are the days when even an extravagant marriage ceremony could be done with a handful of family members. In today’s time, it involves a grandiose setup, multiple outfit options, or perhaps even a destination wedding just like how most celebrity couples are doing these days. All of this involves a considerable amount of expenditure. This does not even begin to list down thousands of other contingent expenditures; you are both to incur while planning your wedding.

Why you should go for a personal loan for weddings 

Since a wedding is one of the most anticipated events in anyone’s life, it is evident that most people and their parents will start financial planning and saving for the dream wedding. That being said, actually planning a wedding is a whole different ball game altogether. You may encounter several unforeseen expenses or an unprecedented increase in the prices of some commodities due to general inflation. But, fret not as this is where a personal loan for weddings, or what we call a wedding loan, comes to your rescue. 

Essentially, wedding loans are nothing but usually an unsecured personal loan for wedding expenditures specifically. Instead of borrowing from relatives or liquidating your investment, a personal loan for weddings may be a better choice, especially from an online lender. While there are several ways of availing a personal loan from an online lender like EarlySalary instead of a commercial bank or a co-operative bank, a dedicated wedding loan from such online lenders is the one-size-fits-all solution to all your wedding expenditure, and you should go ahead with it because of the following reasons:

  • Easy and hassle-free Application and repayment procedure

With the recent overhauling in the fintech sector, getting wedding loans has become as easy as online shopping. All you have to do is download the app from a financial provider like EarlySalary and follow quick steps to get your loan.  To know more about how to get a personal loan in less than 5 minutes, click here.

  • Instant disbursement

Now you don’t have to fill out a mountain of paperwork and wait for several days for your loan to get approved. After filling out the form online, an instant disbursement of upto 5 lakhs is made directly into your bank account. To know more, click here

  • No need for any collateral or security 

Since they are essentially an unsecured personal loan for weddings, there is no requirement of any security or collateral to take the loan and saves you from a ton of paperwork for the same as well. In today’s time, unsecured loans are surging in popularity.

Things to be kept in mind before you take a wedding loan 

While it is clear as day that a wedding loan is a one-stop solution for all your wedding planning needs, you should not just take a blind leap into any financial commitment, no matter how lucrative it may seem. So, keep the following things insight before you take a wedding loan and go on to celebrate the wedding of your dreams:

  • The interest rate on the loan

The interest rate upon your loan can be an important determinant factor in taking the loan. Ensure that you do your market research well and choose a lender that suits your needs the best. To know more about what factors help determine the interest rate in personal loans.

  • Eligibility criteria and other technical reasons  

These are the prerequisites of taking a loan and depend upon the lender to the lender. Make sure to carefully go through the eligibility criteria to save yourself from the hassle of rejection of your application.
Apart from them, factors like a previous rejection of the application, poor credit history, among others, can also lead to rejection. So, make sure to cover all ground as far as terms and conditions go. 

Concluding words 

At EarlySalary, we take care of all your wedding loan needs in an instant to make your wedding the most memorable day of your life. With fixed and low-interest rates, easy repayment options, and simple eligibility criteria, we are the first choice as far as personal loan is concerned. Visit our Wedding Loans offer and make all your wedding dreams come true in just a click.

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Long Term Or Short Term Loans: Which should you choose?

Tech has served as well. As we transition from 2020 to 2021, we’re well past the fragmented fintech systems of the past, if they could be called fintech at all. Now, it is now easier to take personal loans to meet urgent needs, as both online and offline methods of application have been simplified. With online personal loan applications, you can receive quick credit with minimal paperwork. Some banks provide salaried individuals with personal loans pre-approved upto a certain amount. Interest rates also differ depending on various factors like your credit score and the lender. 

All of our loans though can be categorized into short term and long term loans.

What are short and long term loans, exactly?

Short term loans

Short term loans have a repayment tenure of less than a year or two. They are generally appropriate for small, immediate capital requirements. These are usually unsecured loans that require no asset commitments. Paperwork required is minimum. Nowadays, you can quickly obtain a short term instant personal loan online with any leading bank or digital lender like EarlySalary

The interest rate may be higher as the loan tenure is shorter. Loans under this category would include, for example, credit card loans, Instant cash loans, advance salary loans, etc. Digital portals like EarlySalary provide you with an instant personal loan with minimum hassle. 

Long term loans

loans, short term, long term

Long term loans have a longer reimbursement tenure ranging anywhere from 24 months to decades depending on the type of loan. These loans are generally suited for borrowing large amounts of capital. 

While the interest rates are generally lower than short term loans, the total ratio of interest paid to the borrowed amount is much higher. Loans under this category would include home loans, car loans, large personal loans, loans for long term hospitalization expenses, etc. 

Short term loans vs long term loans: How do they differ?

Short term or long term loans have their share of differences. Your unique requirements will help you determine the type of loan most suitable for your needs. You can choose the type of loan you want by using the information below alongside identification of your needs, budget, comparison of lenders available, and then zero in your loan.

  • Tenure 

Short term loans: These loans have a flexible repayment tenure ranging anywhere from 90 to 360 days. 
Long term loans: These loans are repaid over a year or more.

  • Rate of interest

Short term loans: The interest rates are generally higher because repayment tenures are shorter.
Long term loans: The interest rate of these loans is lower since the tenure for repayment is longer compared to short term loans.

  • Documentation

Short term loans: There is minimal documentation. At EarlySalary, there’s zero paperwork.
Long term loans: In the case of long term loans, the lender can request additional documentation for collateral assets as well.

Short term loans: There is no need for collateral.
Long term loans: Collateral is required, and in most cases, you have to submit security documents to the bank.

  • Accessibility

Short term loans: You can apply for short term loans easily online. Approvals are usually dispersed within a few days.
Long term loans: You can start the application process online, but offline verification is usually involved. Hardcopies of collateral documents usually have to be deposited or mailed to the lender. The approval times are longer as there are more rigorous documentation checks.

Short term loans: They have high EMIs because they have a short repayment period. 
Long term loans: In this case, the payment gets dispersed over several months. Therefore the EMI is lower per month.

loans, short term, long term

Which loan should you choose?

The ratio of cumulative interest paid to the borrowed amount is smaller with short term loans, as compared to long term loans. Thus, if your credit requirements are not too high, and you can pay a higher monthly EMI, choose a short term loan so that you pay the least amount of interest.

If your monthly budget is limited, you can opt for long term loans to reduce the EMIs, with an extension of repayment tenures.

If you are looking for smaller credit amounts, short term lending is suitable, but long term lending is more fitting if the credit requirements are high.

For your credit history, long term loans carry more weight as the loan extends over a long time and regular payment of EMIs has a positive effect on credit scores.

Which personal loan is right for you?

The market clearly has many financial instruments, each with different characteristics and advantages. While choices differ based on the amount of credit required, your monthly budget, and interest rates, hopefully, this post has helped you decide the right pick for yourself.

Feel free to contact us for any questions on credit, loans, and your instant cash needs! We are here:
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Here’s How To Find The Right Balance Between Saving, Investing, and Spending

Have you ever found yourself in situations where juggling between the many expenditures, investments, and savings just seems impossible? It often happens that in our busy everyday lives, we may not have a sense of how much we are spending. But for some of us, it is only when we run into financial troubles like budget shortfalls that we realize that we have not found the right balance between saving, investing, and spending.

For the most part, the prospect of striking this perfect balance does not seem too difficult. All one needs to do is chart out an effective financial plan based on personal goals and allocate the budget accordingly into these three streams. But sometimes, people can find themselves in tricky situations and that is where financial advice may be needed.

To truly understand this trilemma, let us take an example. Consider a scenario where someone might wish to buy a laptop but their monthly budget just isn’t allowing. Should they go ahead anyway and use up their savings? Should they skip their monthly SIP investment and withdraw from the scheme? Or should they just postpone buying a laptop? In all these cases, the opportunity cost is huge. Using up savings that you have set aside for a different purpose, say, a medical emergency, is not really advisable. Missing out on investments and withdrawing from schemes can disrupt your investment goals and lead to losses. At the same time, putting off buying that laptop could mean losing out on projects, online courses, upgrading a skill, or even office work. 

balance between saving, investing and spending
Finding the Right Balance Between Saving and Spending

How, then, do we navigate such situations? To answer this, we first need to understand why both savings and investments are important, and how together, they help to create an effective financial plan.

#1 Saving and Investing – Risk versus Returns

While the concept of spending requires little introduction, saving and investing often requires a bit of clarification. Investing is something that people indulge in to obtain larger returns on their wealth. For this reason, investment often involves a relatively higher amount of risk. Investment, therefore, is done to achieve larger goals such as buying a house or creating a retirement fund. On the other hand, saving is for smaller goals. It involves a negligible amount of risk and negligible returns. Therefore, between savings and investments, there is a bit of a trade-off when it comes to risks and returns. But since the goals of both are different, one cannot be a replacement for the other. To attain a good balance, both are equally important.

#2 Liquidity

Another aspect here is liquidity. Savings in banks are more liquid than investments. Higher liquidity means that those funds are available more easily. This is particularly important for emergency expenditures like visits to the hospital, urgent travel requirements, etc. Allocating adequate amounts to bank savings and liquid investment funds is imperative while also investing in long-term investments since they provide higher returns.

#3 A Financial Plan that Creates the Perfect Balance

balance between saving, investing and spending

This brings to the most important step – creating the financial plan. The foremost thing would be to analyze your short-term and long-term goals, select appropriate investment vehicles, and allocate the amounts accordingly. Generally, monthly investments are a better option compared to lump-sum investments since they have the advantage of dollar-cost averaging and it is easier to pay smaller amounts every month. In addition to this, a certain amount must also be allocated to savings. As far as expenditure is concerned, it is always best to spend within one’s limits. Here are a few tips to consider.

  • Make a distinction between essential and non-essential expenditures and set your priorities.
  • Diversify your investment avenues and look into tax saving plans. 
  • Look into new-age credit options such as EarlySalary to meet short-term demands.
  • Be receptive to changes and adapt accordingly. Sometimes, making adjustments to the original plan becomes necessary.
  • Evaluate your finances and estimate your returns.

Conclusion

Now that we understand how to strike a balance between saving, investing, and spending, we can find a better solution to the example presented earlier. For a person who wishes to buy a laptop from their monthly budget, using up all savings or withdrawing from investment schemes can both be unadvisable options. This is where new-age options like instant credit or no-cost EMIs from EarlySalary can offer a way out and allow customers to spend without adverse effects on their savings or investments. 

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As an Employee, Why Should You Care About Financial Wellness Benefits?

In today’s time, financial wellness benefits have become a sine qua non for employee job satisfaction, no matter the designation, salary, or the industry. The importance of ensuring employee financial wellness is being recognized by every organization, be it a small startup or a multinational corporate organization. In fact, to know more about how great companies deliver the best financial wellness programs, read our previous blog post here

What exactly is a financial wellness program? 

Broadly speaking, a financial wellness program is a support or assistance given by the employer to their employees in matters of personal finance and wealth management. It is a collection of services offered directly by the employer or through a third-party expert like EarlySalary. These services can include workshops on building a balanced personal finance portfolio or financial crisis management, providing contingency funds in cases of emergency to the employees, or offering rebates or discounts in the day-to-day expenditures of its employees. 

Why is financial wellness important? 

In this generation, employee satisfaction is higher up on the priority list for companies than ever before. In Gallup’s State of the Workplace Report, it was seen that all organizations that made employee satisfaction an integrated goal within their business strategy saw impeccable results in terms of increase in productivity, reduction in employee absenteeism, and reduction in employee turnover. It is important that due care and attention is given to all aspects of employee wellness – mental, social as well as financial. Therefore, financial wellness programs assume importance from the viewpoint of both the organization as well as the employees. To know more about the importance of financial wellness from an organizational viewpoint, refer to one of our previous posts

As an employee, why should you care about financial wellness benefits? 

A sound financial wellness program is one that helps both parties involved – the employer and the employee. In fact, according to Salary Finance’s Survey, businesses in America suffer losses of $500 billion USD per year on account of employees’ personal financial stress.

Financial Wellness, job satisfaction, employee satisfaction

Therefore, while the former gets a more focused and driven workforce as well as goodwill in the industry, it is the latter which enjoys more direct benefits from a well-rounded financial wellness program. The following points highlight the crucial role a good financial wellness program plays in aiding you, as an employee, to get the best from your job. Here’s how: 

  • Lower stress related to financial health 

In a 2019 survey, it was clearly illustrated that as many as 69% of workers had stress due to their shaky financial position. It is a universal fact that financial stress is one of the major factors adversely affecting not only your personal health as an employee but also the organization, indirectly. So, by offering a sound financial wellness program, this stress can be better managed and you can focus on performing better at work without having to worry about how to meet the next EMI or rent deadline. 

  • Easier asset creation

Asset creation in terms of big investments in real estate, cars, and market instruments, among others, is one of the most important personal goals for any individual. By either providing financial assistance to you in the form of salary advances, loans at a lower rate of interest, or giving you cognitive assistance by way of workshops, seminars, or professional assistance in financial goal setting and wealth management, the employer can make asset creation an easier and hassle-free process.

  • Post-retirement security

Even though most countries have some form of post-retirement security schemes in one form or the other in the public sector, it is not as prevalent in the private sector. A sound financial wellness program, therefore, helps in financial goal setting and encourages better financial management, helping you to manage finances on a macro level, and ensure your financial stability in the long run. 

  • Easy repayment for personal loans

A comprehensive financial wellness program, apart from making an individual better at managing their personal finances, can also involve making loans available at lower rates than the market, or even zero interest (which consequently makes their repayment easier). It can also include easier repayment options for internal loans and deferred EMI options, making the repayment of loans less stressful. In addition to a smoother repayment, it also helps in credit score building which is also a contributing factor in getting an economical repayment plan with banks or other financial institutions in the market. 

  • Elevated job satisfaction 

As already discussed, financial wellness is one of the driving forces behind an employee’s productivity at the workplace. In fact, with the stress that can be caused to you as an employee, there can be a dire impact on your performance and job satisfaction. Further, according to EBRI’s Employer Approaches to Financial Wellbeing Solutions Survey, as many as 39 percent of employees seem to think that the best way to measure if the organization is offering a comprehensive financial wellness program is overall improved job satisfaction. 

Since, according to Maslow’s Theory of Need, job satisfaction is a major component of an individual’s social and security needs and has a great impact on self-esteem, it is pertinent that you look into the financial wellness program that your employer is offering you and to what extent is it adequately aiding in achieving higher job satisfaction. 

 Parting Thoughts 

It is clear as day that an exhaustive financial wellness program is required not only to benefit the employees but also the organization and society at large. However, putting together a program like that can pose to be a serious challenge to any organization on account of lack of specialized knowledge about finances, lack of dedicated and trained staff to enforce it, and alterations required to meet the requirements on an individual level. That’s where the role of a specialized financial services provider like EarlySalary comes into the picture. It offers a wide range of benefits to employees and can curate the same as per individual needs and wants. A team of specialized professionals can assist you at every step which is why increasing numbers of organizations are enthusiastically opting for it. Contact us, or send a referral to your HR, to put an end to your financial wellness woes at once! 

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5‌ ‌Personal‌ ‌Finance‌ ‌Mistakes‌ ‌Young‌ ‌Professionals‌ ‌Make‌

In essence, the term young professional commonly refers to people in their 20s-30s working in any profession or a white-collar occupation. It is a general notion that young professionals who have just started their professional life usually face a lot of challenges in terms of managing their personal finance.
There are essentially two reasons for this: 

  • One, they come to terms with relatively low pay when they’ve just begun working, which becomes challenging to manage. 
  • Second, it takes a certain amount of time to get a grasp of the real-life expenses and handle them responsibly.

Most young professionals have a feeling that their financial career has just started, and therefore, they have a lot of time to dwell on personal finance decisions and planning. 

However, there are ways how one can dodge personal finance mistakes. 

This post will guide young professionals to recognize the financial mistakes, and ways they can overcome the errors. If you want to know more about why this is the time you should focus more on your finances, read our previous blog here

Mistakes committed while managing personal finance

When it is about finances, we all make mistakes and poor decisions, especially in our youth. There is a dire need for young professionals to organize and manage their personal finances. If you do not have prior knowledge about the financial mistakes one could make, then it is best to refer to an expert like EarlySalary. Here are the most common personal finance mistakes that people make while earning in their early 20s and 30s.

  1. Spending more than they earn – One of the most widely made mistakes is spending more than your income. In an ideal situation, you should spend in such a manner that while your needs are met, you can also keep aside a certain amount as your savings and emergency fund. Overspending every month will hamper your financial stability in the long run.
  2. Falling into the debt-trap – In recent times, young professionals are drawn to the idea of quick success without thinking much about the probable drawback of that. Once you fall into the debt-trap in your early career years, it will become exceedingly difficult to bring back your personal finance on track.
  3. Making investments in depreciating assets – Most young professionals are seen to be interested in assets that are depreciating like cars, trendy gadgets, bikes, expensive clothing, etc. Instead of investing in depreciating assets if the same money is invested in appreciating ones like bonds, gold, securities, and land, then the amount you invest will come back to you along with the interest amount.
  4. No long term financial goal – Financial goals should be set and outlined as soon as a young professional starts earning. For a fact, you cannot manage your personal finances without knowing where you finally want to stand financially. Personal finance is closely related to having proper financial long term goals.
  5. Misuse of credit cards – The connection between a credit card and young professionals are almost unbreakable. Young professionals take credit cards for granted and misuse them for any purpose. Owning a credit card is not a bad idea but using it carelessly is a notable personal finance mistake of young professionals.

Ways to avoid personal finance mistakes

Knowing how to dodge personal finance mistakes can be a tricky task, especially if you are just getting started in your career. Following a few simple points can significantly help you in dealing with your personal finances. Below are five ways young professionals can avoid making personal finance mistakes.

  1. Have a personal budgetPlanning a budget is the first step towards managing personal finance. Unfortunately, most of the young professionals overlook the importance of a monthly planned budget. You need to know how to adjust your budget in times of crisis. An ideal budget will help you understand how you should spend our money throughout the entire month. A budget is the most beneficial tool to gain control over your personal finance. 
  2. Focus on saving and investing – It is difficult to come across young professionals who are interested in saving and investing. Since at this period, you earn more while responsibilities on you are less, it is the best time to invest and save. Later you may earn more; however, your responsibilities and financial liabilities will also increase.
  3. Plan before getting a loan – A major mistake that young professionals make is going ahead with opting for a loan, without prior planning. Doing this can cause them to lose out on their personal finance while repaying the loan. Young professionals must research lenders before opting for a loan. One of the trusted lending platforms to consider is EarlySalary
  4. Don’t ignore small expenses – There are several small expenditures which young professionals keep on making, believing that spending small amounts will not result in a huge change in expenses. It is the biggest mistake one can make. Small but consecutive expenditures are the masked enemies who will hit your wallet without your knowledge.
  5. Get an understanding of taxes – Filing income tax might be difficult for many new young professionals. At times, they make several mistakes that later on reflect on their personal finance. Not filing your income or investment creates lots of confusion while filing for returns of income tax.

Remember

A critical point that young professionals need to remember is that you don’t require a fancy degree or an impressive educational background to avoid making personal finance mistakes. If you know the common mistakes and ways to prevent them, then you can very efficiently manage your personal finance. Knowing the pitfalls and their escape will not only help you with your personal finance but will also guide you to have a more secure long term financial success plan. However, managing personal finance is a challenging task, and more than often, you could feel the need to seek professional help. It’s here that the role of a specialized financial service provider like EarlySalary comes into play. We offer a wide range of financial assistance to put an end to the financial worries of young professionals like yourself!

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This Children’s Day, Gift Your Child the Habit of Saving

The best gift to your children on this children’s day could be inspiring a quest to achieve financial interdependence by imparting the knowledge of savings and investments. Kids pick habits of their parents, be it their shopping custom or any financial activity they do. Teaching the children the art of saving is one of the first steps you can take to help them on their journey of financial independence, however long it may be. 

At EarlySalary, we’re not just about loans and credit. We’re passionate about a financially strong, resilient society. It’s why we offer instant education loans to enable parents in making the most prudent investment for their children – in their learning. It’s also why we couldn’t help ourselves in sharing some ways through which the habit of saving can be inculcated in your children. Here they are:

  • Fixed pocket money: With great money comes greater responsibility. Instructing children not to spend everything as soon as they receive money, whether verbally or by action, is one of the easiest steps to take. An incentive can also be given, not necessarily money, for their good deeds like helping with house chores, being at their best behavior, or completing their assigned work.
  • Teach them to be accountable: Ask them to keep a note of all their ‘expenses’ and their ‘income,’ from buying a notebook to receiving money as a token of love from relatives. The money is supposed to be kept in a safe place, which should be taken care of. They should learn to be accountable for expenses without taking it as a burden.
  • Opening a bank account: Opening a bank account should be top on the list after your child turns 18, or if you can open one during their childhood, the better. Teach the benefits of keeping the money in the bank; describe its safe nature, the possibility of earning interest, etc. Encourage them to deposit their money in a savings account, which could be their piggy bank, with all their pocket money or any kind of gift money received from relatives.
  • Financial awareness: During weekends and holidays, parents can sit with their children and describe some of the financial world’s nuances in simple terms. Talk about this as if they were stories or tales. Teach them about the basics of savings and investments and give good illustrations to support your ‘tale.’ This will ensure that the kids grow up to be more financially aware. As they grow older, discuss some financial decisions like taking a new gadget, car, or planning a vacation. Allow them to put in their suggestions.
  • Setting goals: As they grow older, seed in your children the thought about their future wants and needs, and they should be encouraged to work for it. For example, your child wishes to have an RC-helicopter worth Rs.1,000, encourage them to save for their desire, and of course, add something from your side so that they can achieve their desire. 
  • Teach about comparison: A toy might cost a certain amount at one place, while it may cost lesser elsewhere. Let the kids prepare a list and compare the prices of those items over different places. The advantages are obvious – this will teach them to get the most out of the money, and any kind of hefty pricing wouldn’t dupe them. Share your experiences and show how you shop by comparing across different platforms.
  • The importance of giving: Earning and spending are aspects of life that come into one’s behavior without teaching. But helping the less fortunate should also be among the top lessons to be seeded in your children. This will teach them to be grateful for their upbringing and develop a sense of empathy in them. Find ways for them to help others. If they are fond of animals, take them to animal-shelters or if they are environment-conscious, ask them to donate something for that cause.
Children’s Day, savings

Money management is one of the most valuable skills you can give your children. The best way to do that is by demonstrating it yourself. And perhaps the best time is Children’s Day. As they say, when the foundation is strong, the whole structure will stand on its own. For more financial insights, head to the EarlySalary blog.

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