To Buy or To Sell

To Buy or To Sell

A common question that comes to most of us under the COVID 19 Crises related to our investments is what should we do with our current holdings in Equity Shares and Mutual Funds (Debt and Equity).

Should we Buy at the current levels or should we sell at the current levels.

What will happen to the economy? By when will it recover?

Will the Financial System collapse?

I'm pretty sure, even the biggest asset managers have no clue of how thing will play out in the next 1 to 2 year.

This pandemic is an unprecedented situation which will  not only take toll on Human Life but in the Global Economy as well. India announced a complete lock down on 25th March 2020, bring the country to a grinding halt on the economic front. The Government has already lost a significant portion of the GST Contribution due to the lock-down for the month of April 2020. GDP Forecast for FY 2020-21 will reduce drastically. IMF also has cut the Global Growth significantly for this period.

RBI has announced a slew of measures to ease the liquidity situation in the system to support the Banking and NBFC Sector. The golden questions is How much of this will actually reach NBFC Sector which has been lending to a segment which was not catered by the Banking System. Will the Banks support the NBFCs with the liquidity being provided by RBI?

Business that are highly leveraged are eligible to receive an interest Moratorium, which means eventually they will have to pay, hence impacting the bottom line of these companies. When such companies lose 1 months sales, it will have a huge impact on the Bottom line for the entire Financial Year. This can lead to cuts in certain spends to reduce the overall impact on the bottom line for this year. 

The salaried segment in the country could be staring at a situation ranging from a Salary Cut to a Job Loss.  This can restrict the overall spending power of the people which will lead to slower than expected recovery in the economy.

The Outlook for Liquid fuel consumption is expected to be subdued for CY 2020, further indication no significant change in the Global Economic Outlook in the near term.

All said and done, as on today I believe, for those who are holding on to Equity investments should look to reduce the under-performing investments as the market rises and re-deploy around July and October 2020 upon declaration of Q1 and Q2 results for FY 2020-21 only after reviewing these results. 

For those holding investments in Debt Schemes should make sure they are holding good quality paper.

For those holding Cash in Banks, should look to increase their equity allocation gradually over a period of 1 year as there will be more clarity on how things will shape up ahead.

Nothing goes Up for Ever and Nothing comes Down for Ever, the markets will move in cycles, different reasons for falls every time. India as a country is better placed as compared to other countries due to the population demographics. We are still not very heavily dependent on Exports unlike China who exports most of the goods made in their country. Gradually as our economy starts walking again, we should be okay with our investments as well.

PS: The above are only my views for educational purpose and should not be constructed as an Investment Advice in any form.

Consequences of Procrastination!

One Idiot - The simplest way to teach youngsters to invest

How Mutual Fund SIPs have created wealth over the last 15 years: Large Cap and Diversified Equity (www.Advisorkhoj.com)

How Mutual Fund SIPs have created wealth over the last 15 years: Large Cap and Diversified Equity

May 5, 2014 by Dwaipayan Bose | Mutual Fund | 3263 Viewed

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Systematic Investment Plans (SIPs) were introduced in India almost 20 years back by Franklin Templeton. Since then, SIPs in good funds have generated excellent returns and created wealth for the investors. SIPs offer a simple and disciplined way to accumulate wealth over the long term. Mutual Fund SIPs work pretty much like bank recurring deposits, except they generate superior risk adjusted returns compared to recurring deposits. There are a number of benefits of retirement planning through Mutual funds Systematic Investment Plans (SIP):-

• The biggest advantage of SIPs is that, they make the need to time the market irrelevant. It is not possible to predict accurately how markets will behave. By investing at a regular frequency, e.g. monthly, one is invested both at the high and the low points of the market. SIPs work well in volatile markets, by averaging the cost of the investment.


• SIPs engender a disciplined approach to investing. By investing a fixed amount out of regular your savings, you will be able to build a corpus for your long term financial needs. Money not invested often gets spent on things that you may not need.


• Mutual Funds are very flexible instruments. There are no restrictions and penalties on regular SIP payments and withdrawals, unlike PPF or ULIPs. You can start a SIP with a monthly investment, as low as Rs 500. Some mutual funds have even lower minimum investment limit.


• For the smart investor, mutual funds offer more choices and transparency. You can select products based on your risk profile, track record, and fund objectives.


• Equity oriented mutual funds are more tax efficient than most other investment products. Long term capital gains for equity mutual funds are tax exempt. Most debt investments, with the exception of public provident fund, are taxable.

In this series of articles, we will look at how SIPs have created long term wealth for the investors in the last 15 years. In this article, we will discuss how SIPs in some large cap and diversified equity fund, have created wealth for their investors. For our discussion, we have selected 7 large cap and diversified equity funds that have given good returns in the last 15 years. This is, by no means, a comprehensive list of all the funds that gave good returns in the last 15 years. This just an illustration of how long term investments in SIPs, have created wealth for investors. Each of the funds in our selection has given SIP returns of nearly 20% annualized. Since SIP investments are made over a period of time, the method of calculating SIP returns is different from that of Lump Sum investments. SIP returns are calculated by a methodology called XIRR, which is a variant of Internal Rate of Return (IRR). XIRR is similar to IRR, except XIRR can calculate returns on investments that are not necessarily strictly periodic.

For our examples, we have assumed a monthly SIP of Rs 3000 only, made on first working day of every month in the funds that we will discuss. Let us assume the SIP start date was 15 years back in May 1999. Over this period, the investor would have invested Rs 5.43 lakhs in SIPs of the following mutual funds. Let us see how much wealth would they have accumulated, by investing in the following funds.

• ICICI Prudential Top 100 Fund: Within the ICICI Prudential stable, ICICI Prudential Dynamic Plan gave the highest annualized returns among all large cap and diversified equity funds in the last 10 years. But this fund has not yet completed 15 years, and so we were not able to select this fund. However, the ICICI Prudential Top 100 fund, a large cap fund launched in 1998, has also given excellent returns over the last 15 year period. The fund has an AUM base of nearly Rs 450 crores and is managed by Sankaran Naren. The chart below shows the SIP returns of the ICICI Prudential Top 100 fund, growth option, over the last 15 years.



If you had started a monthly SIP of Rs 3000 in ICICI Prudential Top 100 fund back in May 1999, by now you would have accumulated nearly Rs 24 lakhs corpus, with an investment of only Rs 5.4 lakhs. You would have accumulated corpus of Rs 10 lakhs by the end of 2006, a corpus of Rs 15 lakhs by the end of 2007 and despite the severe financial crisis, a corpus of Rs 20 lakhs by the end of 2012. Over the 15 year period the compounded annual returns on your SIP investment in this fund would be 17.8%.
• SBI Magnum Multiplier Plus Fund: The SBI Magnum Multiplier Plus, a diversified equity fund was launched in 1993. The fund has an AUM base of over Rs 1000 crores and is managed by Jayesh Shroff. The chart below shows the SIP returns of the SBI Magnum Multiplier Plus fund, growth option, over the last 15 years.



If you had started a monthly SIP of Rs 3000 only in SBI Magnum Multiplier Plus fund back in May 1999, by now you would have accumulated a corpus of over Rs 24 lakhs, with an investment of only Rs 5.4 lakhs. You would have accumulated corpus of Rs 10 lakhs by the end of 2006, a corpus of Rs 15 lakhs by the end of 2007 and a corpus of Rs 20 lakhs by the end of 2010. Over the 15 year period the compounded annual returns on your SIP investment in this fund would be 18.1%.
• Franklin India Bluechip Fund: The Franklin India Bluechip fund, a large cap fund launched in 1993, has for long been a favourite with investors. The fund, proclaimed by many financial planning experts as one of the best ever mutual funds, its current relative under performance notwithstanding, has an AUM base of nearly Rs 4000 crores and is managed by Anand Radhakrishnan. The chart below shows the SIP returns of the Franklin India Bluechip fund, growth option, over the last 15 years.


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If you had started a monthly SIP of Rs 3000 only in Franklin India Bluechip fund back in May 1999, by now you would have accumulated a corpus of nearly Rs 26 lakhs, with an investment of only Rs 5.4 lakhs. You would have accumulated corpus of Rs 10 lakhs by the end of 2006, a corpus of over Rs 15 lakhs by the end of 2007 and despite the severe financial crisis, a corpus of Rs 20 lakhs by the end of 2010. Over the 15 year period the compounded annual returns on your SIP investment in this fund would be 18.7%.
• Birla Sun Life Equity Fund: The Birla Sun Life Equity fund is a diversified equity fund launched in 1998. This fund from the Birla Sun Life stable has an AUM base of nearly Rs 650 crores and is managed by Anil Shah. The fund has been ranked No. 2 by CRISIL in its recent mutual fund ranking for the quarter ending Mar 31, up one place from the ranking for the quarter ending December 31, 2013. The chart below shows the SIP returns of the Birla Sun Life Equity fund, growth option, over the last 15 years.



If you had started a monthly SIP of Rs 3000 only in the Birla Sun Life Equity fund back in May 1999, by now you would have accumulated a corpus of over Rs 28 lakhs, with an investment of only Rs 5.4 lakhs. You would have accumulated corpus of Rs 10 lakhs by the end of 2006, a corpus of over Rs 15 lakhs by the end of 2007 and despite the severe financial crisis, a corpus of Rs 20 lakhs around the end of 2009. Over the 15 year period the compounded annual returns on your SIP investment in this fund would be 20%.
• Franklin India Prima Plus: The Franklin India Prima Plus fund is a diversified equity fund launched in 1994. This fund from the Franklin Templeton stable has an AUM base of nearly Rs 1990 crores and is managed by R.Janakiraman and Anand Radhakrishnan. The chart below shows the SIP returns of the Franklin India Prima Plus fund, growth option, over the last 15 years.



If you had started a monthly SIP of Rs 3000 only in the Franklin India Prima Plus fund back in May 1999, by now you would have accumulated a corpus of nearly Rs 31 lakhs, with an investment of only Rs 5.4 lakhs. You would have accumulated corpus of Rs 10 lakhs by the end of 2006, a corpus of over Rs 15 lakhs by the end of 2007 and despite the severe financial crisis, a corpus of Rs 20 lakhs around the end of 2009. Your corpus would have crossed the Rs 25 lakhs mark by the end of 2012. Over the 15 year period the compounded annual returns on your SIP investment in this fund would be 21%.
• HDFC Top 200 Fund: The HDFC top 200 fund, a large cap fund launched in 1996, has for long been a favourite with investors. This fund from India’s largest AMC, has often been proclaimed by many financial planning experts as one of the best ever mutual funds, its current relative under performance notwithstanding. The fund has an AUM base of over Rs 10,000 crores and is managed by Prashant Jain. The chart below shows the SIP returns of the HDFC top 200 fund, growth option, over the last 15 years.



If you had started a monthly SIP of Rs 3000 only in the HDFC top 200 fund back in May 1999, by now you would have accumulated a corpus of nearly Rs 35 lakhs, with an investment of only Rs 5.4 lakhs. You would have accumulated corpus of Rs 10 lakhs by the end of 2006, a corpus of nearly Rs 20 lakhs by the end of 2007. Despite the severe financial crisis, your corpus would have crossed the Rs 30 lakh mark by the end of 2010. Over the 15 year period the compounded annual returns on your SIP investment in this fund would be 22%.
• HDFC Equity Fund: The HDFC Equity fund is a diversified equity fund launched in 1994. This fund from India’s largest AMC has an AUM base of nearly Rs 10000 crores and is managed by Prashant Jain. The chart below shows the SIP returns of the HDFC Equity fund, growth option, over the last 15 years.

If you had started a monthly SIP of Rs 3000 only in the HDFC Equity fund back in May 1999, by now you would have accumulated a corpus of nearly Rs 38 lakhs, with an investment of only Rs 5.4 lakhs. You would have accumulated corpus of nearly Rs 10 lakhs by the end of 2005, a corpus of nearly Rs 15 lakhs by the end of 2006 and a corpus of Rs 20 lakhs by the end of 2007. Despite the severe financial crisis, your corpus would have hit the Rs 25 lakhs mark by the end of 2009 and crossed Rs 30 lakhs by the end of 2010. Over the 15 year period the compounded annual returns on your SIP investment in this fund would be 23%.
Conclusion
In this article, we have seen how SIPs in large cap and diversified equity funds over the long term have created wealth for the investors. SIPs benefit from the power of compounding, and therefore the earlier we start our SIP, the greater is the potential for wealth creation. However, it is important to select a good fund for our SIPs. Your financial advisers can help you select a good fund that is suitable for your risk profile. As your risk profile changes over time, you should re-balance your portfolio to align with your risk profile. Tomorrow, we will discuss how SIPs in small and midcap funds have created wealth for the investors.

( Mutual Fund investments are subject to market risks, read all scheme related documents carefully.)

I got my first Testimonial

To,

Vivek Gutka,

WealthCare Investment Solutions

Dear Vivek,

"It is a real pleasure for me to give a testimonial for WealthCare Investment Solutions."
"Before i met you, I had previous experience of financial advice offered by bankers and i never felt that our interests were clearly understood by these advisors...”
"I thank you for your courteous service which has been clearly and carefully tailored to my needs and personal concerns. In addition to helping me find the best possible mutual fund investment considering my personal financial circumstances and my attitude to risk & ethical investment, your advice enabled me to be confident that i have robust investment plans in place for the future. You explained the choices and possibilities so that i have felt supported and empowered to make these important decisions wisely"
"I will recommend you to my friends. Thank you for your guidance and professional concern. I look forward to working with you for many years to come."

Thank you,
Yours Sincerely,

Pankaj R. Goenka

Purchases made on EMI – Good or bad? (Yahoo Finance - BankBazaar.com)

When its festival time and you notice almost every other shop offering discounts and offers, you are tempted to go on a shopping spree and buy even things you may not need. But what happens to your liquidity at such times and how do you settle your credit card bills after the shopping? Merchant outlets and credit card companies recognize that this could be a concern to many shoppers and offer a scheme of payment by Equated Monthly Installment (EMI) in order to tap such customers as well and increase their sales. This is very popular in India for electronic appliances, mobiles, laptops and other gadgets. An EMI scheme means you can purchase the product and begin using it immediately, but pay the price over an extended period of time in installments. On the face of it, this scheme looks very attractive and easy on your purse. But there is no such thing as a free lunch. Let’s look at the extra costs you are likely to pay when you opt for an EMI scheme and what you should evaluate before you opt for such a scheme.

Costs to be borne while opting for an EMI Scheme:

Higher amount paid: Raj opted to purchase his mobile phone worth Rs. 40,000 through an EMI scheme offered by the retailer, which was in tie-up with his credit card company. The EMI was for 6 months, which should have technically worked out to a down payment of Rs. 4000 and 6 EMIs of Rs. 6000 each. But Raj discovered that he had to pay a down payment of Rs. 4000 and 6 EMIs of Rs. 6833 each. That is, he would have ended up paying Rs. 5000 more on the product if he had opted for the EMI scheme. This is because most EMI schemes come with a hidden cost, which is the interest you will have to pay.

Additional costs: Apart from the interest cost, most credit card companies charge a processing fee when you opt for an EMI scheme. This is a percentage on the transaction amount and varies from bank to bank.

Default in paying EMIs: The EMI amount will get reflected on your monthly credit card bills along with your other dues. So when you fail to make the payment of your credit card dues in a month, you will be charged the normal interest of anywhere between 24%-36% for non-payment along with the late payment fee and taxes. The EMI amount, in addition to being subject to these charges will also carry the basic interest cost thus causing a double whammy.

Absence of discounts: Often banks tie up with merchant outlets and offer the EMI option on various products. However, most products carrying the EMI option do not have the benefits of a discount or any offers attached to them. For example, an LCD costing Rs. 30,000 under the EMI option may be available at Rs.27,000 without the EMI option.

Pre-closure penalties: If you purchase a product on an EMI scheme offered by your credit card company, it is most likely that there will be a pre-closure penalty. This means that if you have the cash to pay off the entire amount before the completion of the total number of EMIs, you will have to pay a pre-closure charge, which is usually in the range of 2.5%-3% of the outstanding principal amount.

Things to evaluate before opting for an EMI Scheme:

As you can see, even though an EMI option may be light on your pocket, there are several costs attached to it. You must therefore evaluate the offer on the table before you opt for it. As a first step, remember to read the fine print thoroughly, as card companies can change terms at their discretion. You must also check if the total payment you are making, including all the EMIs and the down payment is equal to the MRP of the product or if it is more than the quoted price. If it is more, then it means you are being charged interest and/or processing fees for the option.

You must then check all options for the product in other stores – both online and offline, and see if you can get the product at a better price if you do not opt for EMI. If the difference is substantial, it is better to opt out of EMI.

Remember to consider the likely costs like pre-closure penalty when you evaluate the EMI option, as there are a few credit cards which offer zero pre-closure charges. This is because you should have the flexibility to close the scheme when you have excess cash. Also remember to consider how the existing credit limit on your card will change because of opting for the EMI scheme. When you use EMI on credit cards, your existing credit limit comes down to the extent of the outstanding amount.

Is an EMI scheme good or bad?

Although a good EMI scheme is easy on your wallet, you must try to avoid it as the first option. You may not only be spending more than the actual worth of the product, but also splurging first and then relying on EMI payments is not healthy for your finances. Remember to evaluate all costs associated with the scheme and then choose or reject it.

5 Common Estate Planning Mistakes To Avoid - Yahoo Finance (Business Insider)

Estate planning certainly isn't one of the sexiest ways to spend your day.

The idea of deciding how you'd like to die and who you'll leave your assets to can be overwhelming. 

That's why we like the idea of approaching estate planning like you would building a new home. Start with a solid foundation early enough in life, and then build it up one piece at a time. Once the roof is up and you've passed inspection, it's just a matter of trimming the hedges, changing a few light bulbs and renovating every once in a while. 

"There is no perfect estate plan," says CFP Nancy Anderson.  "We can’t plan for every contingency, but if we take some time to think about the major things, plan for them and double check that the right people are on the right documents, it can go a very long way in the end." 

Here are a few common estate planning mistakes to avoid: 

Thinking you're too young to make one. So, you're 33, fit as a fiddle and far too busy at your 9-to-5 to worry about something as dry as your estate plan — right? Don't kid yourself. You may not have many physical assets to your name yet, but a lot goes into estate planning besides deciding which of your siblings get first dibs on your vintage record collection. If you wind up in the hospital with no way to communicate, you'll wish you had designated a Power of Attorney to decide on treatment or at least jotted down how you'd prefer to be cared for at the end of your life.

Keeping your will a secret. Your life is not a Hollywood film. The idea that your family will pile into your attorney's office an hour after your funeral for the dramatic unveiling of your will is far from normal — or wise. In most cases, estate planners recommend telling your family exactly what they can expect before you pass away. Even if that means playing referee while your kids squabble over who gets your antique china set, it's worth dealing with the disagreements before it's too late for you to have a say.  "It's a double-edged sword; people don't want to communicate what property is going to be given because it could cause animosity," attorney Senen Garcia, founder of SG Law Group in Coconut Grove, Fla. told Bankrate.com. "It may cause animosity now, but you can deal with it. Later on, you have no control of it because you are gone."

Leaving too much cash to the wrong people. We'd all love to dump a pile of cash on our loved ones' laps after we pass away, but in some cases that's the worst possible way to leave a legacy. The key is to dole out money in a way that will improve their lives for the long-run. Using a trust fund can be a smart way to leave money to relatives, since it is administered by a trustee who must dole out the cash exactly how and when you tell them to. 

Forgetting about the blow from taxes. If you have considerable assets to leave behind, you'll need to carefully consider the estate taxes that will be levied against them. One way experts recommend getting around hefty estate taxes is to carefully plan ahead which assets you'll leave to certain family members and friends. You can "gift" them assets up to $13,000 per year while you're still alive under IRS guidelines before gift taxes kick in. 

Not editing your plan along the way. Life is far from predictable, which means your estate plan, like any financial plan, should be updated as your financial and personal circumstances change. Changes such as a birth, marriage, divorce, job loss, health condition, etc. all warrant factoring in to your estate plan. And beyond that, you'll have to seriously keep an eye on the ever-changing laws in both the state where your estate plan was drawn up and the country as a whole.

What are you waiting for? We recommend seeking a professional to help draft and review your estate plan. But don't just rely on one — both your financial advisor and your attorney (sometimes even in collaboration with each other) should be able to cover all the issues involved, making sure you've remembered to cross your T's and dot your I's.

So you haven’t got your income tax refund yet? (DNA 16th Sep 13)

Here are some ways to expedite the process and avoid waiting too much further for it

Paying tax is a pain! Filing your annual return correctly within the due date is a bigger pain. And the biggest pain of them all is to wait endlessly for that tax refund that is rightfully yours. Having been a good citizen and having complied with the law of the land dutifully, you are right in expecting that you are treated fairly by the department. And the least courtesy that they can show towards a diligent tax payer like you is to refund his money quickly and in a hassle free manner. While your complaint is fully understandable, an objective analysis of the situation would help. Steps that the Income Tax department has taken ? Sensitive to the agony of the tax payers, the Income tax (IT) department has taken a few steps to make life easier for the tax payer. Here’s a look. ? Refund Banker Scheme: Introduced in 2007, SBI, Mumbai, is mandated to handle the refunds centrally and the amount may be credited to your bank account through RTGS/ECS or sent by cheque. This has simplified the process and also quickened it. ? Facility to check the refund status: The department has enabled you to check online, the status of your refund. You may visit https://tin.tin.nsdl.com/ oltas/refundstatuslogin.html ? Centralised return processing: Earlier, the returns were processed at the local IT office and refunds were issued from there. Now the same is mostly being carried out at the Centralised Processing Centre (CPC), Bangalore, and refunds arranged from there. This has resulted in streamlining of the return processing and refund process. How to avoid delays Well, not all the blame for the delayed refunds lies with the department. You, at your end, can take a few steps to avoid or minimize the delay. ? Ensure taxes are correctly credited to you: Quite often, the tax payments claimed by you may not match with the records of the department. You can verify all your TDS and advance tax payments from your Form 26AS, which can be downloaded from https://www.tdscpc.gov.in/en/ taxpayer-home.html. Periodical reconciliation of the same and immediate steps to set right any differences would ensure full credit of your taxes. ? Ensure the correct account number: If the wrong account number is mentioned in your return, your refund may get delayed as result. ? Submit ITR V on time: Ensure that the acknowledgement (ITR V) for submission of your tax return has been forwarded to the CPC within the specified time. Unless this is done, your tax return may be considered as not filed. For more such guidelines on personal finance, visit www.itsallaboutmoney.com

Rookie mistakes to be avoided (DNA 16th Sep 13)

These are some of the recurring investment faux pas that most people still tend to make even in their 30s

Vijay Pandya

In your early twenties, it seems the money you earn is never enough to last the month. Saving seems to be an impossible concept, unless if a strict parent imposes restrictions on spending and forces you to do it. The mid-twenties is when future goals become clearer and saving for them starts off in earnest. The crucial difference between saving and investing usually gets highlighted in your early thirties. However, having over a decade of experience doesn’t help much. Managing money and managing investments are two totally different tasks, requiring an entirely different approach and set of skills. Making money earn money is the key factor here that tends to be missed out. Earning less Saving enough money to pay three to six months of living expenses in case of job loss concerns is a good idea, but then keeping that amount for a rainy day in your savings account is just plain stupid. Invest it in fixed deposits instead and keep rolling them over instead of encashing on maturity, its that simple. Unbalanced portfolio Similarly, while equities do give a good rate of return, the risks are equally great. Maintain a balanced portfolio so that volatile markets do not completely deplete your net worth overnight. Diversify across instruments and sectors even while dealing with ‘safe’ options like mutual funds. Unclear goals Do you want to live in a spacious 2BHK flat or opt for a 1BHK and send your child abroad for higher studies? Buy an entry-level hatchback or top-end SUV? Party every weekend or once in a few months? Vacation abroad twice a year or once in two years? Unless if you are clear about your projected spends, it will be impossible to plan your investments in sync with them. Unexpected inflows Diverting your Diwali bonus for an outstanding credit card payment gets you out of a financial crunch but did you learn anything from the experience? They say those who do not learn from history are condemned to repeat it and you may just exemplify that adage next year. Unexpected inflows should be invested and reinvested, not spent. Stopgap solutions Taking a personal loan to bridge the gap and buy a bigger house solves an immediate need but adds a high-cost liability that will offset whatever returns your current investments are making. Instead, ‘break’ a few fixed deposits before their maturity. Losing projected interest for a few months is better than paying it multiple times over for years on end. Following friends What works for your office colleague, school buddy or train friends may not necessarily be applicable to your financial situation. Blindly investing where others do without understanding your own financial potential, abailities and constraints, is strictly avoidable. Top 5 Problems And Solutions 1 Uncontrolled spending One way to control and monitor your spending is to open a separate bank account and designate it as a spending account. Both husband and wife need to spend only from it. As soon as you receive your salary, transfer the budgeted amount, say Rs 25000 to your spending account. Then spend your monthly expenses from it. This account is for all your expenses. Investments or EMI will not be mingled with it. Whenever you check it, you will be able to make out how much has been spent so far. End of the month you will have a complete history. Now you can analyse and control your spending. At the beginning of the month, your mind knows the balance is 25000 and the countdown starts. It starts thinking how we can run the show for the rest of the month with this balance. 2 Credit card trap The simple and successful way to use credit card is to pay the 100% due amount on the due date. Minimum balance payment, EMI purchase through credit card, balance transfer from one credit card to the other will slowly take you to the debt trap. 3 Money compatibility Couples often don’t work on their money compatibility. This is a serious problem. Check how compatible you and your spouse in money management. You may be conservative and your spouse may be aggressive. You may think that the best place to invest is stock market and your spouse may think bank FDs. You should communicate your money management style to your spouse as well as you need to understand the money management style of your spouse. Both of you need to analyse the merits and demerits of money management style of each other and their own. Then you need to create a mutually agreed combined money management style.This will be vital to you both throughout your married life to help minimise stress from disagreements about money. 4 Not having a plan If you are not having a financial plan, then things will not be under your control. A financial plan tells you what is your potential and what are all the things possible with that. This gives you clarity and confidence. 5 Poor risk management Life cover, health cover, property insurance and having emergency reserve: These 4 items are more discussed and less practiced.