We both earn and our collective take-home is Rs. 60, 000. We have credit card dues of Rs. 51, 000 and a personal loan with ICICI of about Rs. 2.93 lakh. There are no savings at the end of each month. We would like to close the debts and go in for housing loan to purchase a flat. Please advise as to how the debts can be repayed. Is it good to take on housing loan when we have credit card expenses, personal loan due and regular monthly expenses to take care of?

Things have been happening so suddenly. It was a while before I realized I am almost stuck in a trap (or at least to me it seemed to be so). I am not much of a savings person. I use my credit card a lot.

The only saving grace seems to be that I have taken no loans and I have no liability.
Otherwise I’d be stuck in a debt trap. With no way to know how to get myself out of it. Let’s just say that I am one of the “lucky” ones. What about those who are not so lucky? What can they do when in a debt trap?

One option is to go to a financial advisor or consultant. But, they can be expensive.
The better solution is to approach a credit counseling center. There are several credit counseling centers in cities across India.

Some banks also have own credit counseling centers too, such as the Bank of India-sponsored Abhay, at Dadar in Mumbai. This agency, the first of its kind, also has centers in Gumla (Jharkhand), Wardha, and Chennai.

ICICI Bank’s credit counseling centre, Disha has centers at Ahmedabad, Hyderabad, Vijayawada, Kanpur, Delhi, Chennai, and Kolkata.

These centers will help you chart out a plan to repay your debts. You can swap your high cost borrowings for low cost debt. Interest rates may be bought down to as low as 18 per cent for levels such as 36 per cent in some cases.

These centers can also help you restructure the loan portfolios and formulate repayment plans. They may also help borrowers negotiate with banks for restructuring debts.

Here are the addresses:

• Abhay (Bank of India), 61 A, Sadanand, 1st Floor, Above Bank of India Branch, Gokhale Road (north), Dadar (West), Mumbai- 4000 028. Call 022-24221843.
• Disha (ICICI Bank), Prince Apartments, Ground Floor, Karani Lane, Ghatkopar (West), Mumbai 4000 028. Call 65971815/86/87. Visit www.dishfc.org
• Union Mitra (Union Bank of India), Union Bank Bhavan, 239, Vidhan Bhavan Marg, Nariman Point, Mumbai- 400021. Call 022-22896502.

Tax is the most terrifying word for one who needs to pay it. There are many provisions in the IT act by which you can plan and minimize your taxes. One of the provisions through which one can reduce tax liability is by taking deductible from gross income to the maximum limit of Rs.100000 under Section 80C of the Income Tax Act. This can done by investing into life insurance policies, PPF, equity-linked saving schemes etc.

So where to invest to get deduction under Section 80C?

Let’s look at some basics and then we would be in a position to compare them:

An Endowment Policy is a traditional policy which has a risk cover policy for a specified period. At the end of the policy tenure the maturity benefit is paid off. The maturity benefit in this regards is the sum assured and the bonus accumulated during the term of the policy.

A term policy as the name suggests covers the risk for the particular term selected. It is the cheapest of all the life insurance policy, as it is the purest form of insurance the premium collected will not include any investment element in to it.

Public provident fund (PPF) there is a lock in period of 15 years with a minimum amount of Rs.500 and maximum of Rs.70,000 to be invested every year. PPF earns 8.00% p.a.

Equity linked savings schemes (ELSS) are basically a tax saving tool; which safeguards an investor from the short term volatility of the market. As it has a lock–in–period of 3 years. It is a high risk, high return investment. The asset allocation of an ELSS would ideally be 90–98% equity exposure and the balance may be in money market or government security. This makes an.

In an endowment policy the liquidity is blocked for the tenure of the policy and you miss out on the opportunity of booming economic conditions. One more negative which is associated with the endowment policy is that the bonus which is declared in the financial year is not compounded and investor is paid only the actual amount of bonus received in the subsequent financial year at the time of maturity. In case you surrender your policy you get a surrender value after paying a certain surrender charges for it.

On the other hand if you purchase a term policy along with a PPF or a term policy along with ELSS you will get a better return on your investment as compared to an endowment policy.

Let us understand with an example. If you take an endowment policy with a sum assured of say Rs.10 lakhs for tenure of 20 years. The annual premium payable would be Rs.47,000. If you buy a simple term life insurance policy for the same sum assured i.e. Rs.10 lakhs for 20 years the annual premium payable would be Rs.2920. The balance of the premium i.e.Rs.44,080 (47,000 - 2920) if invested yearly in PPF for 20 years at 8%p.a. the accumulated amount would be Rs.20,17,187. In other case if you invest the difference of the premium i.e. Rs.44,080 on a yearly basis in ELSS which gives you a compounded annualized growth rate of 12.00% p.a. the accumulated amount would be Rs.31,76,072.

A risk-averse investor should look in for a term insurance along with a PPF option. A risk-liking investor should look in for a term insurance along with an ELSS option since ELSS is more aggressive - its inclination is mainly into equity investments which yield better returns in a longer tenure, beating inflation.

Men build missiles, microchips and machines, rather than yogurt and lipstick.

Not any more.

Women are there all over! They are in many off beat professions which were till now a man’s domain.

Moreover, globally women are known for juggling many roles at a time.

At times it looks like a trapeze act, balancing many roles with élan.

In India, traditionally men have been the bread winners whereas women typically ran the household and saved for those rainy days. This was ‘the’ scenario, till women started working and took the command of financial matters.

Still we notice that the investment decisions primarily rest with ‘men’ in the house be it the brother, husband, father, or father-in-law.

Women have moved ahead from their iconic role within the family. With the changing role of Indian women, there are every possibilities that decision regarding investment with their surplus money may be different depending on the parameters of the investment instruments, degree of risk taking capability and influence of others like husband, family members, friends and colleagues.

This way scenario is undergoing drastic transition. We are witnessing the change of roles…from savers to investors!

For Anni Colaso, an accounts manager with a pharma company, investment decisions have always been hers. She is in total command of making investments and is quite well versed with instruments like mutual funds, SIP, bonds, insurance and other policies. A planned saver and an active investor, she mirrors the independent women of today.

Going by the trend we notice that women have been more comfortable with savings in bank accounts, storing money in lockers, or buying gold or bonds. Though they are known for saving for a rainy day, they might not be smart in taking investment decisions.

In the changed scenario, women are looking at various investment avenues for investing their money though they are known for being risk averse. They are considering investment in direct equity and mutual funds in a big way. Buying property is another attractive investment option for women today. They are getting more comfortable with the internet, hence online trading and a net banking account is an easy facilitator to plan their investments in this fast paced world.

Women love to save on a regular basis and smallest of the surplus income they like to invest prudently. Systematic Investment Plans (SIPs) in mutual funds is a big hit amidst working women. This has enabled them build up a disciplined approach towards investing. Here women are benefited from the power of compounding and rupee cost averaging.

Deena Mehta, leading stock broker, MD & co-founder, Asit C Mehta Investment Intermediates Ltd. encouraged women to invest regularly. She propagated ‘Bachat ko kharcha maniye’ which did the trick. Women understood the importance of investing. She encouraged women to not only save and invest regularly but also motivated them to actively take part in the investment process. Her country wide seminars have many women participants.

Seeing the rising number of women taking part in investment activity, Geogit Financial Services in a move to promote equity investment among women opened it’s first ‘women only’ trading branch in Kochi. According to Mr. George of Geojit, women as a group are cautious. But as a culture we wanted to encourage long-term investment in women.

Every Saturday he holds training session for women, like how to pick a stock, what is the risk involved; if you lose money, if you have a service deficiency, what recourse do you have, etc.

So you see that help/advice is available exclusively for women.

It is important that you keep investment/saving issues on priority in life. Today money today holds the key to happiness; hence women should plan their finances and investments well. Also regularly review all investment decisions from time to time to ensure that they are in line with the overall financial objectives, time horizon and risk appetite.

Take control of your finances to have a rocking life ahead!