Money Archives -

Master to Manage Your Money with the 50/30/20 Rule

Sun, 20 Jun 2021 07:07:42 +0000

The Buyt Desk

Finance management is a topic that eludes the sensibility of many. Are you earning a lot of money but unable to manage it? How will your life change if you had a simple equation for finance management? Here comes the 50/30/20 rule of managing finances. Use 50% of your earnings to buy essentials, 30% to buy things for your whims and fancies, and save or invest the remaining 20%. In this way, you cater to needs, desires, and future financial goals.

Let us dive into the details of the 50/30/20 rule

Essential Expenditure

You cannot survive basic amenities like food, house, transportation, electricity, and water. These common conveniences are unavoidable and will always form a major part of your spending. While you cannot curb them, fix the monthly expenditure on mandatory items to 50% of the monthly income.

Non-Essential Expenditure

It may be your interest to explore the world through travelling. You may wish to purchase makeup from Bobbi Brown. All the expenses catering to your lifestyle come under the category of non-essential spending. The more you have, the more you want! Contentment is not easy to get. Nonetheless, it is essential to containing the lifestyle expenses to 30% of your income. If they encroach this boundary into your savings or investments then be ready to compromise on your essential spending or financial goals in the future. You can observe maximum flexibility in this category of your monthly expenses.

Savings and Investments

After retirement, the incoming money faults or reduces. You may have future financial endeavours may be many like your child’s education or marriage, international travel, purchasing a house, and pension. The time to take a step towards them is now. It is essential to build a corpus while you are earning. Savings alone cannot create wealth. Begin investing your money as per your risk appetite to fund your financial goals. If not greater then at least 20% of your monthly income should go towards investment and savings. Getting from a certified financial consultant is best to decide where to invest your money.

Managing finance is not everyone’s cup of tea. However, the fact is that finance management is quintessential in life. You cannot manage the money yourself. No problem! Consult an expert. An easy and quick solution is 50/30/20 rule. It takes care of necessities, comforts, and dreams. You can modify the rule as per your circumstances. If you earn quite well then choose to invest more than 20% of your income.

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Why Choose IMPS for Instant Online Money Transfer?

Wed, 24 Mar 2021 04:47:30 +0000

The Buyt Desk

You can transfer money online instantly round the clock through National Electronic Funds Transfer (NEFT), Real Time Gross Settlement(RTGS) and Immediate Payment service (IMPS). Out of the three IMPS is the most instant transfer of funds as compared to NEFT. Though RTGS allows immediate payment it is suitable only for those who want to send a large amount. The RTGS enables large value transaction and the minimum amount that can be transferred is Rs 2 lakh. As far as NEFT is concerned you can transfer as low as Rs 1 but its not an immediate transfer. NEFT takes around half an hour to 2 hours to get credited. There is no transaction charge on NEFT transfer done through net banking but NEFT transfer at the bank branch will attract some charge. This varies from Rs 2 to Rs 25. The charges may differ from bank to bank. Similarly for RTGS banks will take a fee of Rs 25 to 50 plus taxes.

How is IMPS different?

If you are looking for an immediate transfer of money then IMPS is the right choice. The acronym IMPS stands for – Immediate Payment service which enables instant transfer of money between two accounts. You could either use mobile banking or internet banking for this transfer. It is available 24 hours and 365 days and works even on the weekend and public holidays. You can transfer as low an amount like Rs 5 and but on the upper side, you can’t transfer beyond Rs 2 lakh.

IMPS charges

Transaction charges on IMPS depend upon two factors- the amount that you are transferring and the bank fee which will vary from bank to bank. State Bank of India charges no fee for the transfer of amount up to Rs 1000. But just as the amount goes beyond Rs1000 there is a fee levied. If the amount is between Rs 1000 – 1 lakh then a charge of Rs 5 is taken and for the amount ranging between Rs 1- 2 lakh SBI charges Rs 15 plus taxes. ICICI bank takes a transaction fee of Rs 5 for an amount ranging from Rs 1000 – 1 lakh and Rs 15 plus tax for an amount between Rs 1 – 2 lakh. These chargers have to be paid by the person who is sending the fund. The receiver has to pay no charge on receiving the fund through IMPS.

How IMPS works?

You can transfer money through the banking app on your mobile phone or use internet baking. When you choose to transfer fund the bank automatically gives you the 3 options of fund transfer- IMPS, NEFT and RTGS. Depending upon the amount you want to transfer you choose the route out of the three. If you want to transfer fund frequently without feeding in the IFSC code and other banking details then you can generate a Mobile Money Identifier(MMID) with your bank and use this ID to transfer money. The beneficiary should also have an MMID to receive the money. Fund transfer can happen without MMID if you have the beneficiaries detail in your payee list.

Advantages of IMPS

The advantages of IMPS which makes it more user friendly are-

Flexibility- It is available round the clock and works even on days of public holidays like Saturdays and Sundays.
Instant transfer- IMPS is an instant transfer of money. The money reaches the beneficiary immediately unlike RTGS and IMPS which takes 30 minutes to 2 hours for the transaction to complete.

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Beware of These 4 Mistakes While Using a Credit Card!

Wed, 17 Feb 2021 14:04:43 +0000

The BuyT Desk

Credit card companies provide you instant money, via credit card, for purchasing things for which you may not have money at that moment. You have time until the credit card bill’s due date to repay this money without any interest (approximately 25-52 days). Instant credit is available to you all the time if you own a credit card. Also, credit cards offer other benefits like rewards points or cashback on your transactions. People apply for a credit card for instant credit and generate a good credit score. A credit score describes your creditworthiness and is determined by credit rating companies. Making purchases using a credit card and repaying the amount before the due date indicates creditworthiness. A good credit score can help you in getting quick approvals for loans. The lender can offer you a loan at an attractive interest rate if your credit score is high. Insurance companies also consider your credit score while deciding the premium amount.

If you use your credit card wisely, you can reap the benefits of an interest-free credit period, discounts or cashback, and a high credit score. People are not attentive to the terms of credit cards and commit some mistakes. These mistakes can incur penalties on you and harm your credit score. Some people are opposed to possessing a credit card as it can create a never-ending debt trap if not used in the right manner. Please avoid the following mistakes while using a credit card, and thus, take its full advantage.

1. Withdrawing cash using a credit card: This is the worst mistake to commit when using a credit card. You do not enjoy an interest-free period on cash withdrawal. Cash advance fees and finance charges apply from the day of cash withdrawal. The finance charges are usually high, and you may end up losing a good amount of money.

If you withdrew money using a credit card under dire circumstances, ensure to repay the amount at the earliest to save steep charges.

2. Paying credit card amount late: When you miss the credit card bill’s due date, the result is a late payment fee and a high-interest rate on your transactions. Also, late payments can adversely affect your credit score, especially if they are late by 30 days or more.

Suppose you cannot remember paying your bills on time then set up an automatic disbursal of credit card payment from your bank account. You may even put calendar reminders for paying bills on time. There is some hope of securing your credit score despite a late payment. You may explain your situation and request the credit card company not to submit this information to the credit rating agencies. They may comply if you have been a reliable payer up until that point.

3. Paying minimum credit card amount: The option of paying a minimum amount of debt by the credit card companies can put you in the debt trap. When you pay the minimum amount, the interest rate starts to apply to the remaining amount. Having the habit of paying only the minimum due amount every month will keep adding interest to your remaining balance.

Pay the full amount due to avoid incurring additional interest and other finance charges. In the lack of funds, request the credit card company to convert your remaining balance into EMI.

4. Maxing out your credit card: Maxing out your credit card is questionable for two reasons. First, you will have a high credit utilization rate. It will prevent bankers and credit card companies from giving you a loan or credit. This is because a credit utilization rate higher than 30% indicates credit management behaviour, which, in turn, suggests that you may struggle to pay back the money. Maxing out your credit card results in penalty APR (Annual Percentage Rate). This means you will pay a higher interest on your due amount.

You can request the credit card company to increase your credit limit or apply for another credit card to avail higher credit. This is a way to ensure that your credit utilization rate does not exceed 30%.

If you have made any of these errors, take steps now to correct them and be careful of their consequences moving ahead. It may take a while, but you can increase your credit score over time, even if it has slumped low.

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3 Easy Ways to Free Yourself from Credit Card Debt

Fri, 20 Nov 2020 10:19:48 +0000

Priyanka Sambhav

Supreme Court, while hearing the loan moratorium matter made an important observation. The apex court asked why should the credit card user get the benefit of compound interest waiver, because they are not borrowers, “They don’t have a loan, they’re purchasing,” observed Justice MR Shah.

RBI had granted a 6-month moratorium to borrowers and credit card users during the COVID -19 lockdown period from March-August 2020. The borrowers and credit card holders were allowed to defer their loan/due payment by 6 months. The moratorium was a postponement and not a waiver so the interest on the loan/due accrued for these six months to the principal amount of the outstanding amount.

A batch of petition praying for extension of moratorium was filed which also argued that taking interest on interest during the moratorium months defeated the purpose of the moratorium. On Supreme Courts’ insistence government came up with a relief plan. The Interest waiver scheme of the government took away the pain of compound interest from the moratorium period. ‘Interest on Interest’ was set aside for retail borrowers and small business units who have loans up to Rs 2 crore. The government made this scheme applicable to all the borrowers and credit card user whether they availed moratorium or not.

The ex-gratia money was credited by banks to all the borrowers including the credit card users. In many cases, it was not a big amount but it was given back to all the borrowers.

Now in the ongoing hearing, Supreme Court has raised a point if credit card users are entitled for this compound interest waiver? If you are a credit card user you would have got back the compound interest portion but you need to carefully handle the outstanding and follow a discipline while dealing with the credit cards. If you are struggling with high debt on the credit card then its advisable to look for ways to repay this. Here are a few options that you should think about for lightening your credit card burden-

1. Avail’ Convert to EMI’

All the credit card companies and banks give the facility to avail ‘convert to EMI’ option on your credit card outstanding. Pay the due with the help of EMI’s and you should choose this because the rate of interest on these EMIs are lower as compared to the higher interest which you pay on outstanding amount.

2. Take a personal loan

It may not look like a good time to take a new loan, but if this is what it takes to get out of the credit card debt trap, then this is what you must do. However, the rate of interest on personal loans are also on a higher side, but it is lower than the interest that you pay on a credit card due. With a personal loan, you can settle the credit card due in one go and close it. You won’t be tempted to use it for further purchases and will be spared from accumulating more to existing outstanding.

3. Use the Balance Transfer Method

You could transfer the outstanding balance of a high-interest credit card to another credit card at a lower interest rate. This has been one of the most widely used ways to reduce credit card debt. There are always many credit card companies in the market offering low-interest cards or zero annual charges, and you could avail one of these cards to lower your burden.

Don’t reel under the pressure of the credit card debt but look for ways to come out of it. You need to attack the debt rather get bogged down by it. If you don’t want to take an additional loan or card to reduce the debt burden, then make a plan and start paying off the due with a targeted approach. You may choose the snowball method where you target the dues one by one. You start by paying off the smaller debt first and then reach the bigger ones. So stay focused and get rid of credit card debts with a plan.

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EMI Moratorium की राहत या बोझ !

Fri, 18 Sep 2020 11:57:03 +0000

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