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Credit Card DebtCredit card debt is usually resorted to when all other option including personal loansare exhausted. Credit card debt is unsecured therefore it carries very high interestrates. A credit card gives you the power to spend money even when you don’t havethe funds. Lots of young people misuse it by spending on frivolous things.Stay away from credit card debt: Lots of people are having problems with credit debt.Paying only the minimum is costly and will ensure that you have debt for a long time.Try to consistently pay as much as you are able to, towards your debts - you will beglad you did.Key Features• Interest rates on credit cards are probably the highest compared to other creditfacilities. The interest ranges from 18-36% p.a.• Debt keeps accumulating via interest and penalties. If you are not paying off yououtstanding balance before the interest free period expires then you will be payinga high interest rate. This can make it hard to reduce your credit card debt• As most credit card limits are low some borrowers tend to neglect the fact thatthe interest payment is relatively small on a month to month basis. This is adangerous practice because the amount of interest you pay can quickly jump toexceed the value of your actual debt• Be very careful of having multiple cards and be very careful of taking up themarketing promotions from credit card providers when they actively try and getyou to increase your credit card limit.Steps to Avoid Excess DebtSet debt limits• Decide how much you can afford to be in debt. Then, make sure that your totaldebt is below this amount• You may also want to set a limit on how much money out of each paycheckyou are willing to spend on debts. Having this sort of limit can be very useful inensuring that you do not overextend your credit.Shop carefully for debts• If you do need a loan, be sure to do your research well. Always understand howmuch you will pay for your loan in interest and look for the lowest interest ratesand the most affordable debt you can fi nd. This will ensure that you do not end upoverspending on interest rates• Once a year, check to make sure that you are still getting the best interest ratesand best loan deals possible.Don’t give into temptation• Once you show that you can handle some debt, many companies will be eagerto offer you more credit. Companies may start sending you credit card offers andyour lenders may offer you additional credit products• While it may be tempting to take out lots of new debt, you need to be wary ofdoing so. Only take out a loan or credit service when you really need toAutomatically have money go towards your bills• Many banks and employers will allow you to have some money automaticallydeducted from your paycheck• This can be a great way to ensure that your bills get paid promptly. Plus, sinceyou won’t even see the money, you are less likely to miss it.34
9. ADVANTAGES OF FINANCIAL EDUCATIONThe pressing need for fi nancial education comes from two areas.Firstly is the deterioration of personal fi nances. Today youngsters resort to livingbeyond their means, have credit card debt and making risky investments.Second is the proliferation of new and often complex, fi nancial products that demandmore fi nancial expertise of consumers. Turbulent market conditions and changing taxlaws compound the need for sound fi nancial education.Even Government servants are moving to defi ned contribution regimes from theearlier schemes with defi ned benefi ts on retirement. Therefore, retirement planningbecomes very important.Some advantages of financial education are:-• Helps build a secure fi nancial future. Lack of fi nancial knowledge can affectan individual’s or family’s ability to save for long-term goals and make themvulnerable to severe fi nancial crisis• Prepared for fi nancial emergencies. By incorporating contingencies in yourfi nancial plan you are ready to face unseen circumstances head on• People who are fi nancially literate are reluctant to buy fi nancial products that theydo not understand and thus do not fall for marketing gimmicks• Feeling a sense of accomplishment. Financial education is effective at movingpeople closer to their goals• Makes a more responsible individual with a disciplined approach to money. Helpspeople from overspending and inculcates a habit of savings and investments• You become more aware of questionable lending practices adopted by banks andother lenders to sell their products• Feel like you are setting a good example for your family• Money management skills can benefi t other aspects of your life10. INVESTOR PROTECTION AND GRIEVANCESREDRESSAL MECHANISMINVESTOR PROTECTION• Securities and Exchange Board of India (SEBI) was established with the primaryobjective of protecting the interest of the investors in the securities market• SEBI can issue directions to all intermediaries and other persons associated withthe securities market in the interest of the investors or for orderly development ofthe securities market• SEBI has notifi ed the SEBI (Investor Protection and Education Fund) Regulations,2009 with a view to strengthening its activities for investor protection. The fundshall be used for the following purposes:-■■Educational activities including seminars, training, research and publications,aimed at investorsAwareness programmes through media - print, electronic, aimed at investors35
Page 3 and 4: TABLE OFCONTENTS1. Introduction2. B
Page 5 and 6: 2. BASICS OF SAVINGS AND INVESTMENT
Page 7 and 8: Goals come from your values. What y
Page 9 and 10: Assignment:Calculate the retirement
Page 11 and 12: How will you classify the assets ow
Page 13 and 14: Step 2:- Determine your expense for
Page 15 and 16: day you are invested is a day that
Page 17 and 18: 3. CHOOSING RIGHT INVESTMENT OPTION
Page 19 and 20: Example:-Suppose your goal is to sa
Page 21 and 22: Infrastructure Bonds of Financial I
Page 23 and 24: • May or may not be listed on the
Page 25 and 26: • Strategy is to invest in a comb
Page 27 and 28: How to Spot one?The Ponzi scheme us
Page 29 and 30: Points to Remember• Participants
Page 31 and 32: • The individual invests a certai
Page 33: Key Features• A senior citizen wh
Page 37 and 38: Notes37
Page 40: SEBI TOLL FREE HELPLINE 18002275757

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