How to improve your Credit Score in 5 easy steps

Credit scores, commonly called CIBIL scores, [Credit Information Bureau (India) Limited] are a crucial parameter that lenders evaluate before approving loans and credit cards. As per the RBI’s mandate, all banks should check the CIBIL score of every loan/credit card applicant at the time of evaluation. A poor CIBIL score reflects poor credit management skills, and makes you an undesirable borrower.

EarlySalary understands that you should be in complete command of your finances. To help you with this goal, we have listed 5 simple steps to improve credit score:

  1. Timely credit payments: Slacking off on bill payments can lower your credit score. Missing deadlines may cause a significant drop as it indicates that you are not a responsible borrower. There is no quick fix to this, because credit scores reflect credit history, so a late payment could affect your report for years.
    Pay bills, including but not limited to, credit card payments, rent, utilities and other bills on time for a hassle-free future lending experience. Another way is by limiting your card spending to 50% of the limit or conversely increasing your card spending limit. Spending more than 50% of your card limit signifies that you might not have enough to repay your debt obligations in future.
  2. Lower balances: Remember that you should spend only as much as you can repay        within the billing date. Pay off your debts as soon as you can and keep card spending on the lower side. Another way to lower balances is by keeping the credit utilisation ratio up to 30% or less.
    Lower balances – which include unpaid dues on loans and low or zero balances on credit cards can positively reflect on your credit score. This can also help you manage your finances better.
  3. Retain your old credit card account: You may have to switch to newer cards for various reasons. However, changing accounts isn’t the best of ideas. If you have a credit card account that is well managed, it is better to retain it for long as longevity of such an account can increase credit score. Good repayment history reflects your credibility as a lender.
  4. Report and resolve inaccuracies: If you discover any discrepancy in credit report, appeal for clarification if you have a valid proof to support your point. Disagreements and errors like typographical data entry errors or software errors can occur, so you’ll want to get them rectified at the earliest to avoid future trouble. The appeal for rectification must be addressed within a timeframe of one month (30 days) by the lender or financial agency/institution. Ideally, you should not apply for a fresh credit until old credit score disputes are resolved.
  5. Use a secured card: Credit score can increase by using a secured credit card which is offered by many Indian banks such as ICICI Bank, Citibank, SBI, Axis Bank etc. These cards are issued against a fixed deposit of a nominal amount. Timely balance payments can increase credit score. So if due to some circumstances you default on payments, your bank will immediately liquidate the FD against which you have received the card and the debt will be repaid. This option is ideal for those with low credit scores or those with no credit history. It can improve your credit story and gradually, increase your credit score.

A high credit score can be leveraged for availing better credit terms, higher credit limit, interest rates and additional benefits. So work up your credit score if it’s not in the acceptable range and enjoy the benefits of preferential pricing and hassle-free borrowing. Click your cibil score here :-

Emotional Intelligence for Workplace Leaders

By: Sudhir Dhar, Director – Group CHRO, Motilal Oswal

Emotional Intelligence is a type of social intelligence that involves the ability to monitor one’s own intelligence related to emotions and also respect other people’s emotions and use this information to guide one’s thinking and action.

Emotional intelligence is the ability to identify, use, understand, and manage emotions in positive ways to relieve stress, communicate effectively, empathize with others, overcome challenges, and defuse conflict. Emotional intelligence impacts many different aspects of your daily life, such as the way you behave and the way you interact with others.

Importance of EI in organizations
All matured organizations today are embarking or have already been on a journey to make themselves more emotionally intelligent as it has been seen that an organization’s collective EI has an impact on the bottom-line. One of the strongest arguments for the economic advantage of EI in organizations is given by Jac Fitz-Enz, who is known for his extensive work on “the human asset concept” and “human capital ROI”. He has analysed a data of about 600 organizations, including quite a few in India, selected for profitability and other proxies of performance. He identified similar/common key practices in managing people. These are similar with the emotional competencies that symbolize top-performing professionals and thus concluded that EI is a significant factor contributing to their performance.

Building EI in organizations
EI can definitely be developed. However, the L&D practices at most organizations are not prepared for it. It requires an engagement of our emotional habits. Changing habits such as learning to approach people positively instead of avoiding them, to listen better, or to give feedback skillfully, is a more challenging task than just adding information.

Motivational factors also make it more difficult and complex than cognitive learning. It often involves ways of thinking and acting that are more central to an individual’s identity. The prospect of needing to develop greater emotional competence is not easy for us to take. Thus, it is more likely to generate resistance to change.

A systematic and committed approach is necessary to build emotionally competent organizations. A strategic cycle of assessment – learning – practice – feedback over time will enable organizational members to build competencies that can help develop high performing leaders for the organization.

According to Daniel Goleman, an American psychologist who helped popularize EI, there are five main elements of emotional intelligence:

Social skills

The more that you, as a leader, manage each of these areas, the higher your emotional intelligence goes.

1. Self-awareness
If you’re self-aware, you always know how you feel, and you know how your emotions and your actions can affect the people around you. Being self-aware when you’re in a leadership position also means having a clear picture of your strengths and weaknesses, and it means behaving with humility.

So, what can you do to improve your self-awareness?

Keep a journal – Journals help you improve your self-awareness. If you spend just a few minutes each day writing down your thoughts, this can move you to a higher degree of self-awareness.
Slow down – When you experience anger or other strong emotions, slow down to examine why. Remember, no matter what the situation, you can always choose how you react to it. (Our article on Managing Your Emotions at Work will help you understand what your emotions are telling you)

2. Self-regulation
Leaders who regulate themselves effectively rarely verbally attack others, make rushed or emotional decisions, stereotype people, or compromise their values. Self-regulation is all about staying in control.

This element of emotional intelligence, according to Goleman, also covers a leader’s flexibility and commitment to personal accountability.

So, how can you improve your ability to self-regulate?

Know your values
Hold yourself accountable
Practice being calm

3. Motivation
Self-motivated leaders work consistently toward their goals, and they have extremely high standards for the quality of their work.

How can you improve your motivation?

Re-examine why you’re doing your job
Know where you stand – Determine how motivated you are to lead.
Be hopeful and find something good – Motivated leaders are usually optimistic, no matter what problems they face. Adopting this mindset might take practice, but it’s well worth the effort.

4. Empathy
For leaders, having empathy is critical to managing a successful team or organization. Leaders with empathy have the ability to put themselves in someone else’s situation. They help develop the people on their team, challenge others who are acting unfairly, give constructive feedback, and listen to those who need it.

If you want to earn the respect and loyalty of your team, then show them you care by being empathic.

How can you improve your empathy?

Put yourself in someone else’s position
Pay attention to body language
Respond to feelings – You ask your assistant to work late – again. And although he agrees, you can hear the disappointment in his voice. So, respond by addressing his feelings. Tell him you appreciate how willing he is to work extra hours, and that you’re just as frustrated about working late. If possible, figure out a way for future late nights to be less of an issue (for example, give him Monday mornings off).

5. Social skills
Leaders who do well in the social skills element of emotional intelligence are great communicators. They’re just as open to hearing bad news as good news, and they’re expert at getting their team to support them and be excited about a new mission or project.

Leaders who have good social skills are also good at managing change and resolving conflicts diplomatically. They’re rarely satisfied with leaving things as they are, but they don’t sit back and make everyone else do the work: They set an example with their own behavior.

So, how can you build social skills?

Learn conflict resolution – Leaders must know how to resolve conflicts between their team members, customers and vendors. Learning conflict resolution skills is vital if you want to succeed.
Improve your communication skills – How well do you communicate
Learn how to praise others – As a leader, you can inspire the loyalty of your team simply by giving praise when it’s earned. Learning how to praise others is a fine art, but it pays.

To be effective, leaders must have a solid understanding of how their emotions and actions affect the people around them. The better a leader relates to and works with others, the more successful he or she will be. Take the time to work on self-awareness, self-regulation, motivation, empathy, and social skills. Working on these areas will help you excel in the future!

How Much Of Our Wishlist Did The 2019 Budget Check?

The annual budget announcement is a fairly hyped event, the ones preceding a national election are even more so. Just like this year’s Interim Budget presented by Piyush Goyal for the Modi government. The media was abuzz with a whole range of expectations, predictions and hopes from the people, and now that it’s behind us – people are converging in on the post-announcement analysis to get an accurate sense of what the government has in store for us. How much of our wishlist did the 2019 budget check? What did it leave behind? Let’s take a closer look

#1 – On Taxes

There were expectations of this year’s budget being a tax-friendly one, with some hoping for an increase in the taxable slabs, benefits to pensioners and housing loans. The government delivered on this front, albeit with some modifications. With an increase in the income tax rebate, people earning up to ₹ 5 lakhs per annum are now exempt from paying income tax.

With the benefits available under Section 80C, those earning up to ₹ 6.5 lakhs too can benefit from paying no tax, provided they invest in any of the options available under the section. This move is likely to benefit near 30 million taxpayers. However, with this benefit applying only to those earning up to Rs 5 lakh and not more, some of the middle class may feel justifiably let down.

Piyush Goal also offered some relief to home-owners by abolishing tax on the notion rent of a second home.

#2 – On Farmers

Farmers have consistently remained the focus of a majority of our budgets, and rightly so, given the proportion of our population engaged in the agricultural sector. The 2019 Budget was expected to be no different, and in fact was said to include a direct transfer benefit scheme for the farmers, increase government rural spending, food subsidies and more.

On this front, the budget delivered well – it offered a new scheme for the farmer class in the form of the Pradhan Mantri Kisan Samman Nidhi Yojna, a Rs 750 billion support program for small farmers (those owning up to 2 hectares of farmland). These farmers (estimated to number about 120 million) will receive ₹6,000 annually in three installments, directly to their bank accounts. The government also hiked the Minimum Support Price on all 22 crops by 50%.
#3 – On Real Estate

This year’s budget was expected to bring some relief to the real estate sector, with even indirect announcements like income tax relaxation expected to spur spending from consumers. There were hopes of sops on GST, and clarity on the industry status for the real estate sector. The budget delivered on some of these via a number of announcements – such as the removal of tax on rental income up to Rs 2.4 lakhs, and a 100% tax exemption on profits by real estate developers on affordable housing for a year. Relief on capital gains tax for a second house (up to Rs 2 crores) is also likely to give the sector a valuable boost.
#4 – On Startups

Many entrepreneurs and startups held high expectations from 2019 Budget – hoping for clarity on the notorious Angel Tax issue, easier access to credit for MSMEs, and more. But while calling India’s startup ecosystem the “second largest in the world”, Piyush Goyal did not address these issues, failing to deliver solutions to what have been key issues for the industry. Some announcements however – such as the 2% concession on interest for SME loans up to 1 crore, and small businesses (with turnover less than 5 crore) being allowed to file quarterly GST returns) – have been welcomed by the sector.

#4 – On The Automotive Industry
There was no major direct announcement for the automotive industry, although it is likely to benefit from the increasing spending consumers may engage in after their tax benefits. While a policy on electric vehicles was expected, it was conspicuously missing from the 2019 Budget.

With the farmers direct transfer benefit scheme also announced, many fintech startups see themselves being actively involved in the process and the demands it will generate.

The income tax relief announcement was the highlight of this year’s budget and grabbed the lion’s share of attention, and rightly so – given its potential for impact on many other sectors and industries dependent on consumer spending. But the 2019 Budget had benefits for many others on offer as well, and farmers and the real estate industry in particular may well be pleased with the outcomes.

Want to reduce your taxable income to Rs 5 lakh? Here’s a list of all deductions you can claim

The Interim Budget 2019 introduced some goodies for those earning below INR 5 Lakh per year. So, if your annual gross income ranges between INR 6 to 11 lakhs, you can now try and claim certain tax deductions in order to reduce your taxable income. With the low and middle income group in mind, the Interim Budget 2019 put forth a proposal under Section 87A on full income tax liability for those earning up to 5 lakh taxable income for FY 2019-20.

Before we begin, a quick primer on income tax – which is calculated as follows:
* The sum of all sources is added up to calculate gross total income
* Addition of deductions and other exempted allowances are subtracted
* The net result is termed as the taxable income

It is the above resulting figure that decides the 100% tax rebate as per the 2019 Budget proposals. Now, let’s move to the deductions available (to most individuals) under the Income Tax Act:

1. Income Tax Deductions of Investment under Section 80C
A popular Income Tax Deduction method lies under Section 80C, that allows investments in specified instruments.
These can include:
PPF accounts
Tax Saving Mutual funds
Tax Saving Fixed Deposits
National Savings Certificate
Repayment of Principal on Housing Loan
Premium on Life insurance policy
Equity Oriented Mutual funds
Contribution to Employee provident fund

2. Income Tax Deductions for contribution to pension funds under Section 80CCC and 80CCD
These are income tax deductions which allow payments (of any amount), helping in the initiation of annuity plans of any insurance company receiving pensions. The person is allowed a deduction for the same amount paid under Section 80CCC.
If the person makes the contribution to a notified pension scheme of the Central Government like the National Pension Scheme (NPS), they too are allowed a deduction under Section 80CCD.

3. Income Tax Deduction for Interests on Savings Account under Section 80TTA
A deduction of Rs. 10,000 under Section 80TTA (Chapter VI-A) can be claimed from the interest earned on your Savings Bank Account. This interest income is added under ‘Income from Other Sources’ and then a deduction is provided.

4. Income Tax Deduction for Interests on House Loans under Section 24
Under Section 24, a person with any home loan is allowed to claim deductions for the interest levied on it. It is vital to understand that the deduction is for the levied interest amounts, and not for the paid ones.
Furthermore, under Section 80C, the principal amount of Home Loan repaid is also allowed a deduction.

5. Deduction for Investment made under an Equity Saving Scheme under Section 80CCG
Also known as the Rajiv Gandhi Equity Savings Scheme, this income tax deduction is allowed to all who invest in listed shares or listed mutual funds in a given financial year. The deduction claim includes up to 50% of the amount invested. This is also subjected to a maximum of Rs. 25,000 only.
It is also important to note that this deduction is only applicable for first time investors with a lock-in period of 3 years from the date of acquisition.

6. Deduction for payment of Medical Insurance Premium & Health Check-up under Section 80D
If a person makes any payment for a medical insurance premium either for themselves, their spouse, or their children, they are allowed to claim an income tax deduction for it under Section 80D. This deduction is dependent on whether the individual insured is a senior citizen or a non-senior citizen.
Further, if any amount has been paid for preventive health check-up, deductions are allowed for them as well.

7. Income Tax Deduction for Disability under Section 80DD and 80U
Disabled individuals are allowed deductions under Section 80DD. Dependent family members of disabled persons are allowed deductions under Section 80U. These disability deductions are also defined in the Income Tax Act.
Income Tax Deduction for Treatment of Specified Diseases under Section 80DDB

8. Income Tax Deductions are also provided for treatment of specific diseases for individuals with the disease or for those dependent on the diseased. The deduction is allowed for the actual amount paid for the treatment or a minimum amount of Rs. 40,000 or higher.

9. Income Tax Deduction for Interest on Education Loan under Section 80E
A person is allowed to claim an income tax deduction under Section 80E for the Repayment of Interest on Home Loan taken for Higher Education of Self, Spouse or Dependent Children.
However, it is necessary to understand that this deduction can be claimed only for the repayment of interest on education loan and not for the actual principal amount of repayment. An advantage of this deduction is that there is no maximum limit on the amount to be claimed.
This Deduction is allowed for all Education completions in India as well as outside India.

10. Income Tax Deduction for Donations under Section 80G, 80GGA, 80GGB, and 80GGC
A person can claim income tax deduction for any donation made during the given financial year.
Deduction under Section 80G is a general deduction while the deductions under Section 80GGA, 80GGB & 80GGC are specific deductions. Section 80GGA includes Donation for the purpose of Scientific Research or Rural Development whereas Section 80GGB & Section 80GGC include donations towards all registered Political Parties of the government.

11. Income Tax Deduction for Rent under Section 80GG
If salaried employees who pay house rent, and have no deduction claims of rent (like the HRA exemption) under any other Sections (of the Income Tax Act), then they can claim a deduction under Section 80GG.
Deductions are key income saving tools. With the help of such deductions and exemptions offered by the government itself, there exists a substantial chance of reducing your overall tax payments and maintaining your acquired incomes.

The Winners and Losers in India’s Budget 2019

Prime Minister Narendra Modi’s government announced on 1st February an interim budget likely to boost his government’s popularity and woo voters in time for the 2019 General Elections. The budget, delovered by interim finance minister Piyush Goyal, includes several big announcements likely to benefit rural India and its lower middle-class populace. So let us have a look at who are clear winners in this budget announcement and who stand to lose the most through it.


India has its heart in its rural regions, with farmers forming a large chunk of the population. No surprises then, that the Modi government has come up with the Pradhan Mantri Kisan Samman Nidhi, a 750-billion-rupee farm income support program. It’s a basic income scheme for farmers under which those who own up to 2 hectares of farmland will receive ₹6,000 every year. The amount will be directly transferred to their bank accounts in three instalments. The average farm size in India is about 1 hectare, so this scheme is likely to help about 120 million land-owning farmers across the country.

After farmers, India’s informal sector workers are the clear winners in the budget. The government announced a “mega” pension program for the workers with income below ₹ 15,000; a monthly pension scheme of ₹ 3,000 to be given to these workers after they retire at the age of 60. This is a huge step because this scheme would benefit nearly 100 million Indian workers, who often have no job security or social benefits as they are employed in small enterprises. The scheme would involve a monthly contribution from the workers, of course, but the amount is minimal: ₹ 100 for those applying to the scheme at the age of 29 and just ₹ 55 for those enrolling at the age of 18.

Salaried employees earning up to ₹ 5 lakhs per annum are exempt from paying income tax, and those earning up to ₹ 6.5 lakhs will not need to pay tax if they invest in provident funds and prescribed equities. This is a major relaxation from the previous income cap of ₹ 2.5 lakhs, and it’s likely to benefit almost 30 million middle-class taxpayers.
The government is also set to provide tax relief to people owning more than one house. Currently, if you own two homes, assuming you earn rent from one of them (regardless of whether you do or not), the rent is taxed. The newest budget does away with this rule, although if you own more than two houses, the clause applies for the houses other than the first two.

Real estate sector
The real estate sector has a chance to rejoice as the government announced new measures to boost the buying of homes. During his budget announcement, Goyal promised a home for every person in the country and proposed the allowance of investments of ₹ 20 million from capital gains for buying two residential houses rather than the current allowance of only one. The administration has also increased the period of taxing unsold inventory in real estate to two years.

Rural India
The budget involves increased spending on animal husbandry and fisheries, and an interest subvention plan for small and medium-scale businesses. The former would definitely benefit the people of rural India other than farmland owners, and the latter is likely to be helpful for companies with exposure to the villages, including motorcycle companies and others with interest in India’s villages, like Larsen & Toubro Ltd.


The startup community of India had high expectations from this year’s budget announcement, but they will clearly be disappointed. The hopes for a faster and easier method for license approvals as well as expectations of an increase in funding, especially for new tech like AI and blockchain, apparently proved to be futile. There was no move to help the startup community’s skills crunch or increase its funding.

Bond Holders
Since most of the above schemes have been done at the expense of India’s fiscal deficit, Modi’s government will breach its fiscal deficit target this year, with the budget gap at 3.4 percent. This is the second year in a row that it has not met its target, and this is likely to affect bond holders if Moody’s or S&P downgrade India’s credit rating.

Farm Labourers
Most schemes for farmers focus on owners of farmland, but tend to ignore rural labourers who don’t actually own any land, and this year’s budget seems to be no different. Landless farmers are not going to benefit from the Pradhan Mantri Kisan Samman Nidhi, as they won’t be entitled to the annual support of ₹ 6,000. These farmers are usually extremely poor, and they are, unfortunately, some of the losers in this year’s interim budget.

Although the amount allocated for the Indian defence has increased in rupees (from ₹ 2.85 trillion last year to ₹ 3.05 trillion this time), the amount in dollars is less because of depreciation. The $ 44.5 billion last year has reduced to $ 40 billion this year. Most of the allocated budget is spent in recurring costs, which reduces the money available for new weaponry.
The budget announcement has made several people happy, and left some dissatisfied, as with any other budget. Overall, the schemes for farmers and the middle class seem to be a step in the right direction, but the startup community has apparently been left disappointed.

Budget 2019 Summarized: All Schemes

India’s Interim Budget 2019-20 was announced by Minister of Finance, Corporate Affairs, Railways and Coal, Piyush Goyal on 1st February 2019. Highlights include an annual income scheme for small and marginal farmers, tax benefits for the middle-class, a “mega” pension scheme for workers in the unorganised sector, reforms in stamp duty and more. Here’s a summary of all the schemes announced under the Interim Budget 2019.

Pradhan Mantri Kisan Samman Nidhi Yojna

Under this new scheme, a direct annual income of ₹ 6,000 would be provided to farmers owning up to 2 hectares of land. The money would be given directly to the farmers in their bank accounts, in 3 instalments of ₹ 2,000 each. The first instalment is to be paid by 31st March 2019, meaning the scheme is to come into effect almost immediately. The scheme is expected to benefit nearly 12 crore small and marginal farmers and their families. The government has set aside a budget of ₹ 75,000 crore for this.

Pradhan Mantri Shramyogi Maan-dhan Yojna

Reportedly one of the largest pension schemes in the world, this is an initiative to provide a pension of ₹ 3,000 per month to workers of the unorganised sector, with an income of up to ₹ 15,000. It will supposedly benefit nearly 10 crore workers throughout India. The workers would have to contribute a marginal amount towards the pension per month. The amount is ₹ 100 if they are applying at 29 years of age and only ₹ 55 if they register for the scheme when18 years old. The government has allocated a budget of ₹ 500 crore for this scheme.

Rashtriya Kamdhenu Aayog

The scheme has been set up to improve the sustainable genetic upgradation of cow resources and to enhance productivity of cows. A budget allocation of ₹ 750 crore has also been made towards the Rashtriya Gokul Mission.

Development of Fisheries

In order to give better attention to the development of fisheries in India, the government will create a Department of Fisheries. Through this initiative, the government wishes to promote the livelihood of around 1.45 crore people, who are dependant on this sector.
Moreover, as a part of the budget, Goyal announced a 2% interest subvention to people pursuing animal husbandry and fisheries who avail loans through the Kisan Credit Card. Further, a timely repayment of the loan would result in an additional subvention of 3%.

Tax benefits

Taxpayers having an annual taxable income of up to ₹ 5 lakhs will be exempt from income tax, according to the interim budget of 2019-20. Moreover, individuals with an income of up to ₹ 6.5 lakhs will not need to pay income tax if they invest in provident funds and prescribed equities. Additional tax deductions such as interest on home loan up to ₹ 2 lakh, National Pension Scheme contributions, medical insurance, education loans, etc. have also been provided. The total tax benefit is reported to be nearly ₹ 18,500 crore, benefitting around 3 crore taxpayers belonging to the Indian middle-class. In addition to these tax benefits, standard deduction has been increased from ₹ 40,000 to ₹ 50,000 for salaried employees, providing an extra benefit of almost ₹ 4,700 crore to 3 crore taxpayers in India.
New tax exemptions have also been announced for homeowners. Where currently, income tax is expected to be paid on notional rent if an individual owns more than one house, the new budget gives an exemption for a second house as well. Also, the TDS threshold on home rent has been increased from ₹ 1.8 lakh to ₹ 2.4 lakh, and the threshold for interest income from banks and post offices has been increased from ₹ 10,000 to ₹ 40,000.
Other tax related reliefs, which are mostly procedural, have also been announced. Income Tax Returns will now be processed within 24 hours, and refunds are to be paid immediately. Within 2 years, almost all assessment and verification of Income Tax Returns will be electronic, done without any intervention by officials and completely anonymous.

Rural Allocations

Enhanced allocations have been made for rural schemes like MNREGA and the Gram Sadak Yojna. ₹ 60,000 crore has been allocated for the former whereas ₹ 19,000 crore has been allocated for the latter. The Finance Minister said that additional allocations could be made if needed. A promise was made to provide all households with electricity by the end of March 2019 with an announcement that 143 crore LED bulbs have already been provided. A healthcare program, Ayushman Bharat was reported to have benefited over 10 lakh patients already, giving free medical treatment to people and also medicines at affordable prices through the Pradhan Mantri Jan Aushadhi Kendras.


The defence budget witnessed an increase this year to over 3 lakh crore rupees from last year’s 2.85 lakh crore rupees. The government also announced that it would provide additional funds for defence, if required.

Other schemes

In addition to all these, some other schemes have also been introduced. They include the scheme for a single window clearance which is to be made available to filmmakers and an anti-camcording provision in the Cinematography Act to fight piracy. Social schemes include the government’s plan to build 1 lakh digital villages, a program to give 8 crore free LPG connections to households, an increase in MSP by 1.5 times the production cost for all 22 crops, and a committee under NITI Aayog for notified and semi nomadic tribes.

Financial Wellness in India and the Technologies Aiding It

There’s no stress like financial stress. Money plays a very important role in our lives and not having enough money could disrupt our health, both physical and mental. Not to forget the impact it would have on the performance at the workplace. In the light of increased workload and pressure, employers are now taking the financial wellness of their employees very seriously.

What is Financial Wellness?
Financial wellness refers to the overall health and stability of an individual in monetary or economic terms. It plays a key role in keeping individuals healthy and happy, and an increasing of companies are making it their top priority today. The average worker today, before even starting his job typically brings with them a huge debt in terms of college loans and personal loans that need to be paid off.

Organisations have now begun taking an active interest in improving the everyday financial situation for their employees. This need not be directly in the form of money. Food vouchers, sponsored trips or even simple spa and movie tickets are given out regularly as morale boosters, and they’re working.

How is Financial Wellness implemented and what are the technologies aiding it?
Ever since the onset of online wallets and digital payments, organisations have found it easier to give out benefits and bonuses. Sodexo meal coupons for example, have been adopted by almost all major corporates and are accepted at almost every eating joint in the country. The result? Flexible meal plans plans, more variety for lunches, and increased consumer spending – often resulting in higher happiness and engagement levels. Sodexo coupons are a win-win situation for both the employers and the employees as it saves them a large amount of money that would have otherwise been deducted as tax. The concept has become extremely popular and Sodexo is now the most widely accepted meal card.

Paytm too has rolled out a food wallet feature that is competing head to head with Sodexo, with similar features and benefits. Employees can now eat at KFC, PizzaHut, Burger King, or Taco Bell, while the Paytm food wallet also allows them to carry out their monthly grocery shopping at Big Bazaar.

Companies are also issuing corporate credit cards to reimburse any excess expenses carried out by the employee for the organisation. This could include travel expenses and client meals. Several banks, including State Bank of India, and ICICI Bank have extended their support to a prepaid card model. Expense management brand Happay has also created prepaid cards for business purposes, so that employers can get their money reimbursed easily.

Multiple credit-based companies are also trying to ease the financial pressure of employers and providing loans and salary advances without any added expense.

AmazonPay and FuturePay have partnered with EarlySalary in order for you to shop at the end of the month, without the impending thought of paying immediately. Another app – Simpl, allows people to collect all their online bills so that they can pay the amount in full at the end of the month.

EarlySalary is pioneering the concept of a salary advance to the mass market:

The model focuses on an instant salary advance that lets you pay off all piled up bills, but extends to far more uses – for example, you could splurge it on that dress you have been eyeing for a long time.
Users have a dynamic borrowing limit, depending on their needs, where they can pay back the money in equal monthly installments (EMIs).
Your child’s school takes only bi-annual payments? No problem, the EarlySalary School FeES feature allows you to pay off the entire amount in one go through a salary advance. The borrowed money can be paid back in installments without any additional charges.

Financial Wellness Is Crucial
Financial wellness directly impacts employee productivity. It isn’t rocket science to guess that stressed employees will not perform optimally at the workplace. No surprises then that organisations are also encouraging employers to take meditation and yoga classes. Some companies even offer to reimburse a part of their employee’s gym fees as a sign of encouragement and support. Once employers start promoting and helping with financial wellness, employees interaction and engagement sees an increase. Then there’s a host of other benefits:

Employer costs, such as medical expenses reduce.
The average retirement age also increases if you’re dealing with healthier employees.
Fewer work days are missed if a financial wellness plan is in place.
Perhaps most importantly, low stress on employees lowers attrition rates as well.

Financial Wellness is a top concern for most companies today, with employers trying to fight the financial stress and burnout of their employees head-on. From monthly bonuses and team outings to family and child support, companies have come a long way on financial wellness is concerned, and this would not have been possible without the tech easing the whole process.

5 Reasons A Salary Advance Is All We Need

For a lot of students fresh out of college plunging straight into the work environment, it can be understandably difficult to keep up with all the added expenses. Employees often find themselves either borrowing money from home or living a very frugal lifestyle towards the end of the month. This isn’t very uncommon – setting yourself up in a new city can require a lot of extra cash and this is where the concept of a salary advance would really help. But it isn’t just relocation that can render you short on cash – salary advances can prove useful in a variety of other situations. In case it wasn’t obvious – a salary advance involves paying an employee a part of his pay in advance and covering it up in later installments.

5 Reasons A Salary Advance Is All We Need

For a lot of students fresh out of college plunging straight into the work environment, it can be understandably difficult to keep up with all the added expenses. Employees often find themselves either borrowing money from home or living a very frugal lifestyle towards the end of the month. This isn’t very uncommon – setting yourself up in a new city can require a lot of extra cash and this is where the concept of a salary advance would really help. But it isn’t just relocation that can render you short on cash – salary advances can prove useful in a variety of other situations. In case it wasn’t obvious – a salary advance involves paying an employee a part of his pay in advance and covering it up in later installments.

#1 Convenience and flexibility
It is no secret that sanctioning a loan from a bank is no small task. A salary advance is much more convenient with its procedures, and is flexible with the amount and interest rates as compared to a loan. In most cases, the salary advance is deducted from future pay-slips which makes the repayment easier. You don’t need to save up the money separately for the repayment of the advance. You can also borrow any amount – it need not be a very hefty sum, which can be paid off by the succeeding month itself. Apps like EarlySalary have a dynamic borrowing limit, allowing separate limits for all kinds of expenditure. So the salary advance does not require immense or detailed planning.

#2 Unexpected Emergencies
Not everything is predictable. A sudden sickness or hospitalisation can throw our expenses off-track. During such times, instead of breaking into fixed deposits or taking an emergency loan with a high interest rate, a salary advance can seem like a far better option. This helps avoid huge expenditure cuts in the future. In fact, the money need not be used only for emergency cases. A salary advance can help you get started even on long term plans such as buying a house or a car. A salary advance helps you pay off a large and sudden amount of money, be it hospital bills, credit card bills, or money for a vacation.

Shop now, Pay Later. EarlySalary helps with any untoward expenses.

#3 Easy repayment
A traditional personal loan from a bank often comes with strict and stringent payment dates regulated by the bank. The lack of money at such times often results in higher EMIs (equal monthly installments) with every succeeding defaulted month. Salary advances, on the other hand, have an easy repayment scheme. More often than not they are directly deducted from your pay cheque itself. If not, the repayment schemes are aligned with the payday to avoid any lack of cash during the repayment period.

#4 Quick disbursal
Contrary to the practice at banks, salary advances do not require much time and are not a tedious job. The weeks of paperwork and the time taken to sanction and get loans approved takes a long time, and hence may not be the best idea when you are in urgent need of some cash. Salary advances are much quicker since it basically gets rid of any work with a middleman. There are lots of apps available today which help with securing a Salary advancement.

#5 Low interest rates :
Salary advances have very little interest rates. This helps avoiding and piling on to the already existing cash crunch that you may have. Salary advances also levy interest rates only on the money that is drawn and used, as opposed to banks where the interest is levied on the accumulated amount as soon as it is disbursed.

Salary advances benefit both, the employer and the employee and prevents employees from going into any cash crunches from their early days of employment. Salary advance applications are making the process more seamless and hassle free with their instant approval and quick cash transfer. At EarlySalary, all the benefits of a salary advance are rolled up in two one nice package – with merchant integrations (such as Amazon and schools) in-built to make the process faster and more convenient. Get started here!

Decoding PwC’s Employee’s Financial Wellness Survey 2019

PwC’s 8th annual Employee Financial Wellness Survey was conducted during the last two weeks of January 2019. It tracks the financial and retirement well-being of working U.S. adults nationwide. This year it incorporates the views of 1,686 full-time employed adults. Participants have been categorized by generation using the following age groups: 18-22 (Gen Z), 23-37 (Millennials), 38 to 58 (Gen X), and 59 to 75 (Baby Boomers). 

~ PwC’s 8th Annual Financial Wellness Survey, 2019

The assessment of this year’s PwC’s Financial Wellness Survey clearly reveals that employees are openly coming up about their financial worries related to cash flow and debt challenges. Though unemployment rates are low and slight increases in wages have thrown some respite on the employees, they still are finding it hard to save and to expend on their cost of living. The other side of the tug of war has employers who need to have a stern look at employee welfare programmes to maintain a balanced game. As such employee absenteeism and turnover, and dissatisfaction on a personal level has to be accounted for and addressed by addressing the variegated challenges being faced on one hand and motivating employees to improve the financial well-being and retirement readiness.

Employees indicate that financial wellness means being stress-free and achieving financial stability:

  • About 34% of the employees feel that not being stressed about their finances is financial wellness to them, while 18% feel to be debt-free is what constitutes financial wellness. 
  • 16% feel that having adequate savings and not worrying about unexpected expenses is financial wellness, while 12% feel it is financial freedom to make choices to enjoy life. 
  • A smaller percentage – 4% – feel it to be in the freedom to retire when they want. 
  • Demographically too differences were noted when it came to the stress-free strata of employee populace. About 38% of millennials, 34% of Gen X, and 25% of Baby Boomers felt that they led a financially stress-free life. 

Employees are finding it challenging to cover everyday expenses despite the fact that employee spending contributes as one of the major movers in the economy. While economic growth globally has been stupendous, jobs growth hasn’t kept up. An increasing number of youngsters are incurring debts to meet their personal expenses and employees are carrying balances on their credit cards. The cost of higher education is rising beyond the capacity of many in the salaried class, further adding to their debt. The old, understandably, are more worried about their after retirement expenses – especially health expenses. 

“We believe that employee anxiety will continue to mount without a greater emphasis on increasing savings and improving longer-term financial well-being.”

~ PwC survey report

Financial stress as the prime factor

As per the survey: 

  • Financial or money matters have been stated as the top cause of stress at 59%, 
  • Followed by the job at 15%, 
  • Relationships at 12%, 
  • Health concerns at 10% and, 
  • 4% contributed by other causes. 

According to the report, the difference between a stressed and an unstressed employee is visible in them living on extreme ends of the spectrum. Stressed employees are more likely to have credit card balances and struggle to pay even petty expenses nearly four times more than their unstressed counterparts. Due to stress, these employees are likely to say nearly five times more than they face distraction at work due to their finances. 

An increasing number of employees are claiming to work during their retirement period for their inability to save enough in the present. They have saved less and are intending to raid retirement plans just before retirement. 

The survey shows that more than 80% of the organisations today encase a wellness programme for their employees, but most of these programmes are traditional retirement education and planning programs lacking focus on the financial aspect of stress. 

Post-Retirement plans

More than 80% of the employees feel that they will be working post-retirement. And about one-third feel the need to work after retirement to support themselves financially. The definition of retirement is evolving to include longer periods of unemployment and a more gradual transition into retirement. These changing parameters need to be looked upon and researched to be taken care of well in the wellness programmes for the employees. 

Many employees are now planning to postpone their retirement for they think they haven’t saved enough and due to growing concerns around healthcare costs. Most are uninformed on how to plan their retirement and lack a solid plan. This leads to an increase in stress levels in the present and difficulties in achieving financial stability in the future. Only 43% of the baby boomers planning to retire within the next 5 years are sure about the income they will need to supply themselves during their retirement. These stats are a cause for concern, as they shine light on the level of retirement plans initiated by employers, their inability to deal with employees’ concerns and the need to rethink and replan such programmes for the benefit of employees.

The Curious Case of the Sandwiched Generation

The sandwiched generation aka whose financial expenses are affected due to the care of both their children and parents, find themselves sacrificing their own well being for the ones they care. Millennials and Gen X constitute the majority of the workforce while Gen Z has started to enter the workforce as well. Each of these deal with their own set of issues and problems.

  • 24% of the employees say their employer offers services to assist them with personal finances and more than two-thirds (71%) say they’ve used the services. 
  • The survey also indicates that employees providing financial support to parents or in-laws face additional debt and retirement challenges. About 42% of employees provide financial support to their children over 21 years of age and about half are willing to give up their financial well-being for the benefit of the students. 
  • Millennials who have entered the workspace are already burdened with one or more student loan impacting their financial capability.  

In order to prevent employees from using their retirement plan or savings for meeting current expenses of their parents or children, employers will need to focus not only on individual personal finances, but also on the family unit as a whole such that a balance can be made between emotional decision making and sound financial planning. 

What the Future Holds for these Financial Plans

With digitalisation and expansion of online spaces, employees face the task of determining whom to reach out and whom to trust. A multitude of organisations and online portals are providing a plethora of financial and retirement plans that may or may not benefit the employees. Here, it may be the responsibility of the employer to inform employees about their actual standing and what focus areas they can look to save more for the future. Employers may also need to formulate plans on the lines of the individual as well as family welfare financially. 71% of the employees claim to use these employer-provided services and the numbers have been increasing. Many employees wait for financial advice or seek it personally before they set in to raid the choices. It, thus, becomes incumbent upon the employer to engage employees continually with planning and prevention and intervening when issues are severe and options limited. The employers need to be on their edge in dealing with confusion and concern that hamper the financial wellness of their employees. 

In order to tackle the issues highlighted in our survey, employers will need to take a hard look at their programs to determine whether they effectively address the variety of financial challenges their employees are facing while motivating employees to engage and change behaviors to improve overall financial well-being and retirement readiness.

~ PwC Financial Wellness Survey

Holiday on A Budget: 5 Tips for Making Your Holiday Affordable and Still Enjoyable

Holidays are often an expensive affair, with all the travelling, parties, gifts and everything else that we just have to do. But a budget holiday is not as impossible as it may seem, provided you’re willing to put some time and effort into planning it. There are several ways to save money on your holiday without taking the fun out of it.

We’ve put together a list of 5 tips you can follow to have an enjoyable holiday while on a limited budget.

1.  Make a Budget (and stick to it)

Although it may seem trivial and tedious, this is what helps you save the most money during the holidays. Check how much money you can afford to spend and make a meticulous, detailed plan as to how to spend it. Realising exactly how much you can spend, increases your will to save money. You can strategize your budgeting by assigning priorities and simply cutting out the spends which come in last on your list.

2.  Save on gifting

Holiday gift-giving can get extremely expensive, especially if you have a large family, not to mention your colleagues and friends. Some of the best ways to save money in this case without offending anyone are:

a.    Keep your eyes open for offers

As soon as the festive season rolls in, stores and online retailers alike abound with sales, each competing with the other to give you the best possible deals. Take advantage of this, and buy your gifts via these offers. Sometimes the best offers come during a clearance sale or at the end of a season. There’s no harm in doing your holiday shopping early – you can even buy an expensive Diwali gift for your boss at a “90% off” sale much before Diwali!

b.    DIY is the way to go!

This is by far the best possible way to save money on gifts – make one! It gives an emotional and personal touch which no amount of money spent can ever hope to compete with, and it saves you lots of money in the process! Rather than buying a Christmas card at Archies, you could make a cute card with your best memories written on it. Rather than buying your friend a pen, you could gift them with a scrapbook containing your favourite pictures. DIY gifts always have more feelings attached to them than store-bought ones, and raw materials never cost as much as the finished product!

c.     Alternatives to gifts

Instead of individual gifts for them, consider treating them together. Take them out to dinner, or plan a fun outing they would enjoy. You’ll not only end up saving money, but also enjoy it to the fullest. After all, as one grows older, material gifts matter much less than the gift of precious time spent with loved ones. Of course, there are people you have to give gifts to, like kids, but you can definitely save money when it comes to adults.

3.  Save on travel

Holiday travel gets expensive, and you usually end up spending most on your journey. It’s peak time, and everything from bus ticket prices to airfares shoot up during any holiday. Here’s where you can save in such cases:

a.    Choose your travel time wisely

Ticket prices show vast variation from off-season to peak season, but there’s also a major difference depending on time. Tickets are often cheaper during inconvenient times. For example, a 3:00 am flight ticket from Mumbai to Delhi may cost ₹ 2000, but one at 5:00 pm on the same day may cost ₹ 10,000! If you really want to save money, it’s always better to travel at odd timings. Also, if you’re travelling long distance, prefer night travel as long as it’s safe, thus saving on accommodation.

b.    Walk/Cycle when you can

It’s always better to explore a place on foot, especially if the place you visit is beautiful. Rather than taking random walks to take in the scenery, try to walk to your destination, because after all, walking is free! If the place you’re going to is too far for a walk, you can always hire a cycle rather than anything else. Many cities like Pune have recently come up with pollution-free initiatives, like providing bicycles for rent at low rates.

c.     Buy a travel pass

Most places also have travel passes for those tourists who don’t prefer to walk or cycle. Daily and weekly train or bus passes are usually very affordable, especially if you wish to move around a lot during your time in the city. Different cities have different systems, but they almost always work in our favour when it comes to being frugal.

d.    Travel light

Many flight companies charge exorbitant sums for excess baggage, so it’s always better to travel light. Control what you pack and only take whatever is absolutely necessary for your trip.

4.  Compromise on luxuries

Sometimes, you’ll need to learn to swap a dinner at a fancy hotel for a home-cooked meal. You may have to stay in a traveller’s hostel rather than a 5-star hotel, or swap homes using a service like Airbnb to fund your vacation. You may also need to use public transport once in a while, or travel in economy class rather than business class. But such compromises often make all the difference and save you a lot of future trouble. They also help ensure that you have enough money for another vacation in the near future.

5.  Get Instant Cash With EarlySalary

Despite all your budgeting and careful planning, it is entirely possible you end up with more expenses than you’d have liked. Fortunately, there are services out there – like EarlySalary – tailored to meet exactly this need. India’s first advance salary app – it instantly approves advance cash based on your profile and requirements, directly into your bank account – or even to ecommerce stores if it’s an item you’re purchasing online. Get your advance salary here.

It isn’t too difficult to afford your vacation, fund your holiday, or even take care of sudden expenses, without burning too large a hole in your pocket. Happy holidays!