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Make Mother’s Day special: Moms, let’s plan finances

Hindustan Times, Chandigarh | ByAishwarya Khosla and Madhusheel Arora, Chandigarh
May 11, 2018 03:27 PM IST

Make it special: This Mother’s Day (May 13), gift yourself financial freedom by taking stock of your money and bolster financial security for yourself and your child; meet some women who are walking the talk.

Neha Arora, 32, completed her family after she gave birth to her second child, a son, in January this year. Already raising a 6-year-old daughter, this MBA graduate had a reasonably comfortable financial position. Yet, knowing that money matters are not to be treated casually, she decided to learn about investment options and how money behaves over time.

Dr Anchal Thakur, a research associate at the Postgraduate Institute of Medical Education and Research (PGIMER) research and mother of a four-year-old, believes that moms should explore the stock market without any hand-holding by a stockbroker as these days a lot of information is available online.(Sikander Chopra/HT)
Dr Anchal Thakur, a research associate at the Postgraduate Institute of Medical Education and Research (PGIMER) research and mother of a four-year-old, believes that moms should explore the stock market without any hand-holding by a stockbroker as these days a lot of information is available online.(Sikander Chopra/HT)

A mom’s baby steps

Finally, after consulting friends and family, the newly-minted second time mom took the first major investment decision, outside of her pet penchant for gold. She has taken a post-office scheme, a Simple Investment Plan, in the Sector 22 branch for five years.

Under this, she will invest Rs 5,000 in the post office every month for five years, in the name of her child. “At the end of five years, I will get a lump sum of around Rs 3.7 lakh. This is assured. I invested in this scheme because I am a mom, and I want to create a safe future for my children,” says Neha. While the investment choice can be a matter of debate, Neha’s case gives us a subject to explore.

Expert view

Amanjot Kaur, Relationship Manager, IDBI Bank suggests:

Save for short and long-term goals: It is important to save around 50% of your income. For short-term goals such as buying a car, you can rely on EMI plans, which can take 20% of your income. Save the rest 30% for long-term goals such as education of your children, and for the purchase of a house.

Retirement plans are important: Plan your retirement together with your husband. Save money for exigencies by choosing a smart plan.

Buy an insurance plan: Insurance plans come handy during exigencies such as an accident, an illness or other disasters such as a fire etc. One can always cut down on flashy phones or big LCDs at home.

Prioritise your savings: You must learn to prioritise your savings. There are many plans which are tax free or which offer a tax rebate. This is especially true of 5-year and 7-year plans

‘Women manage money better’

As the world celebrates Mom’s Day this Sunday, HT decided to look at mothers, who are managing money and making it look simple, fun and easy.

Even otherwise, financial planners say that in reality women are better money managers. They also need to be more interested in it owing to two main reasons — they tend to take a break during the most important period of their career for childbirth and they tend to outlive men.

According to Avtar, a Diversity and Inclusion Consulting Firm, between 2003 and 2010, more than 48% of employed women under 30 dropped out of the workforce owing to maternity and childcare. In a national survey by LinkedIn, 60% Indian women said they will slow down their careers, once they have children.

A homemaker doing something constructive

Panchkula-based homemaker Indira Yadav first started dabbling in the stock market as a way of doing something constructive in her free time. “Invest in good shares and then hold on to them as there is sure to be capital appreciation despite fluctuations in the market,” says Indira. She reads The Economic Times and surfs business news channels. Her advice to new investors: use mutual funds as an entry point.

‘There are better options than kitties’

Panjab University economics department chairperson Upinder Sawhney suggests that mothers should go for a systematic investment plan. An investor since 1991, she says, “Most women invest in kitty parties, but the stock market is a better option as you reap long-term returns. Mutual funds give the best returns these days. She adds that nothing can replace hands-on research by the investor herself.

PU associate professor of marketing Purva Kansal says, “A fixed deposit plan was only giving me 7% returns and of this, 30% was going to the government in taxes so I invest one part of my salary in fixed deposits as it’s easy to encash them in case of an emergency; another part in public provident funds, which help in saving tax, and then some in mutual funds.”

Sangeet Jaura, head of International Affairs at Chitkara University, warns moms against putting all their eggs in one basket. She recommends public provident funds.

Prof Paramjit Kaur from University Business School prefers traditional investment practices rather than stocks and mutual funds.

Aarti Bansal, a mother of two and chartered accountant and partner at Bansal, Moza and Associates, says, “I like to make my own investment choices. Invest in stocks of blue-chip companies.”

Dr Anchal Thakur, a research associate at the Postgraduate Institute of Medical Education and Research (PGIMER) research and mother of a four-year-old, believes that moms should explore the stock market without any hand-holding by a stockbroker as these days a lot of information is available online. “Mothers must make smart investment choices to save a nest-egg for their children.” Dr Thakur has already started a public provident fund (PPF) for her son.

A man’s advise

Anil Kapoor, who manages portfolios at Karvy Private Wealth Chandigarh, says, “Mothers should invest in balanced funds as they are a safe option. Equity investment demands patience. Traditional investment areas (banks and post-office) give only 7%-8% returns, while a balanced fund can give around 12% per annum. The way to create wealth is by investing outside the traditional investment areas.”

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