Money guides

The terms and decisions that show up on a family balance sheet, explained without jargon.

80 pages in this section.

• What is an EMI? An equated monthly instalment is a fixed payment that covers both interest and principal, sized so the loan finishes exa...
• What an amortisation schedule tells you The month-by-month table showing how each EMI splits between interest and principal, and what balance remains after it....
• Flat rate vs reducing balance A flat rate charges interest on the original amount for the whole tenure. A reducing-balance rate charges interest only...
• Is no-cost EMI really free? An offer that splits a purchase into instalments with no visible interest charge — the cost is usually folded into the p...
• Part-payment vs foreclosure A part-payment puts a lump sum against the outstanding balance and the loan continues. Foreclosure clears the entire bal...
• Pre-EMI vs full EMI On an under-construction property disbursed in stages, pre-EMI pays only the interest on what has been released so far....
• Staged disbursement on a home loan For an under-construction property, the lender releases the loan in tranches tied to construction milestones rather than...
• Loan-to-value ratio The share of an asset's value that a lender will finance. The rest is your down payment. LTV decides how much cash you n...
• FOIR: how much EMI your income supports The fixed obligations to income ratio — total EMIs divided by net monthly income. Lenders use it to decide how much they...
• What your credit score actually measures A number summarising how reliably you have repaid past credit, built from your repayment history, how much of your limit...
• When a home loan balance transfer is worth it Moving an outstanding home loan to another lender offering a lower rate. On a large balance with many years left, even h...
• Debt avalanche vs snowball Avalanche repays the highest interest rate first. Snowball repays the smallest balance first. Avalanche saves the most m...
• The education loan moratorium A period covering the course plus six to twelve months, during which repayment is deferred. It matches repayment to the...
• Gold loan or personal loan? A gold loan is secured against jewellery you pledge. A personal loan is unsecured and priced accordingly. The gold loan...
• The credit card minimum due trap Paying the minimum due keeps the account current while the rest of the balance rolls over at the card's interest rate. A...
• Processing fees and the other charges The one-off costs a lender adds to a loan: processing, documentation, valuation, legal, and sometimes bundled insurance....
• Floating vs fixed interest rates A floating rate moves with a benchmark. A fixed rate stays put for a stated period, which may be the whole tenure or onl...
• How the repo rate reaches your EMI Most Indian floating-rate retail loans are linked to the RBI repo rate, so a policy change passes through to your loan w...
• Loan against property A secured loan against a residential or commercial property you already own, usually at a lower rate than unsecured borr...
• Co-borrower vs guarantor A co-borrower shares ownership and repayment from day one. A guarantor owns nothing but is liable if the borrower defaul...
• The 50/30/20 rule Half of take-home to needs, thirty percent to wants, twenty percent to savings and debt repayment. It is a starting shap...
• Zero-based budgeting Every rupee of income is assigned a job — spending, saving or repayment — until nothing is unallocated. It removes the v...
• The emergency fund Three to six months of household expenses kept somewhere you can reach within a day. It is what stops a bad month from b...
• Savings rate: the number that matters most The share of take-home income that stays — invested, saved, or used to repay loan principal. It predicts your financial...
• Lifestyle inflation The tendency for spending to rise in step with income, leaving the savings rate unchanged after a raise. It is the main...
• Sinking funds for annual expenses Money set aside monthly for costs that arrive once or twice a year, so they are already funded when they land. It conver...
• Recurring expenses vs one-offs Recurring expenses repeat on a schedule. One-offs happen once and should not shape your baseline. Mixing them makes ever...
• Cashflow vs net worth for a household Cashflow is what moves in and out this month. Net worth is what you own minus what you owe, at a point in time. A househ...
• Budgeting on irregular income Planning against your lowest reliable month, and treating everything above it as surplus with a job already assigned. It...
• The envelope method, updated Allocating a fixed amount per category and spending only what is in that envelope — historically cash, now usually separ...
• Tracking cash and UPI spending Recording the small, frequent payments that never appear on a statement in a useful form. These add up to a meaningful s...
• Joint accounts or separate? Whether a couple pools income into one account, keeps separate accounts, or runs a shared account for joint expenses alo...
• SIP or lump sum? A systematic investment plan invests a fixed amount at regular intervals. A lump sum invests everything at once. For mon...
• Compounding, without the cliché Returns earning returns. Growth is slow at first and accelerates as the base grows. It is why the start date matters mor...
• Asset allocation for a family How household wealth is divided between equity, debt, gold, property and cash. Allocation drives more of your outcome th...
• What NAV actually tells you Net asset value is the per-unit price of a mutual fund, calculated at the end of each trading day. It is how your holdin...
• Index funds vs active funds An index fund tracks a market index at low cost. An active fund pays a manager to try to beat it. Cost is the most relia...
• ELSS funds and the lock-in Equity-linked savings schemes are equity funds that qualify for a tax deduction under the old regime, with a three-year...
• PPF and EPF, side by side EPF is a workplace retirement scheme funded by you and your employer. PPF is a voluntary long-term government savings ac...
• NPS in one page A market-linked retirement scheme with equity and debt options, a lock-in until retirement, and a portion that must buy...
• Fixed deposit or debt fund? An FD pays a fixed rate and returns your principal on a known date. A debt fund holds bonds and its value moves with int...
• Sovereign gold bonds Government securities denominated in grams of gold, paying a small annual interest on top of the price movement. They tr...
• Digital gold, ETFs and physical gold Three ways to own the same metal: an app-held allocation, an exchange-traded fund, or jewellery and coins in a locker. T...
• Rupee cost averaging Investing a fixed amount regularly, which buys more units when prices are low and fewer when they are high. It removes t...
• XIRR vs absolute return Absolute return is total growth. XIRR annualises it, accounting for money going in and out at different times. For any i...
• Matching the asset to the horizon Long-dated goals can carry equity risk; short-dated goals cannot, because a bad final year has no time to recover. It pr...
• Step-up SIPs A systematic investment that rises by a set percentage each year, usually in line with expected income growth. It closes...
• The 4% withdrawal rule A retirement guideline: withdraw 4% of your corpus in the first year and adjust for inflation thereafter, which implies...
• Insurance is not an investment Protection products pay out when something goes wrong. Investment products grow money. Bundling them tends to do both jo...
• Term vs endowment Term insurance pays only on death during the term and costs little. Endowment mixes a small death benefit with a savings...
• Sum assured The amount an insurer pays on a valid claim, fixed when the policy is bought. It is the only number that matters when so...
• Waiting periods in health insurance The time you must hold a policy before certain conditions are covered — typically thirty days initially, and two to four...
• Room rent limits A cap on the daily room charge your policy will cover, sometimes expressed as a percentage of the sum insured. Most hosp...
• Super top-up vs top-up A top-up applies its deductible to each claim. A super top-up applies it to the total of all claims in a year. The super...
• Co-payment clauses A term requiring you to pay a fixed percentage of every claim yourself. It lowers the premium and raises your cost exact...
• Why health claims get rejected Most rejections trace to non-disclosure at purchase, a waiting period not yet served, an exclusion in the policy, or a l...
• Employer cover vs your own policy Group health insurance from an employer versus a policy you buy and own. Group cover is cheap or free but ends with the...
• Cashless vs reimbursement claims Cashless settles directly between insurer and a network hospital. Reimbursement means you pay first and claim afterwards...
• Circle rate vs market rate The circle rate is the government's minimum valuation for stamp duty. The market rate is what buyers actually pay. Stamp...
• Stamp duty and registration State-levied charges payable when property ownership is transferred and recorded. They are a large, unavoidable, unfinan...
• Rent or buy? Whether to keep renting or take a home loan, compared honestly over the period you expect to stay. The comparison is ren...
• Property as an investment Buying real estate to let or to sell later, as distinct from buying a home to live in. It should be judged like any othe...
• Gold purity: 24K, 22K, 18K Purity is gold content relative to pure gold. 24K is 100%, 22K is 91.6%, 18K is 75%. Value scales with purity, so ten gr...
• Making charges and GST on gold The labour and design cost added to jewellery, plus GST on the total. Neither is recovered when you sell. A piece bought...
• How fast a car loses value A new car typically loses 15-20% of its value in the first year and roughly half within five. It is the only major house...
• Valuing inherited property Establishing what an inherited house or plot is worth today, and what it cost for tax purposes. It matters for the famil...
• Nominee vs legal heir A nominee receives the asset from the institution. A legal heir is entitled to it under succession law or a will. They a...
• Why a will still matters A will states who inherits what. A nomination only tells an institution whom to release an asset to. Without a will, suc...
• Running money in a joint family Several earners and shared expenses under one roof, with assets often held across generations and names. Clarity about w...
• Your financial independence number The corpus at which investment income can cover your living expenses indefinitely — commonly 25 to 30 times annual spend...
• Goal-based investing Attaching every investment to a named goal with an amount and a date, rather than accumulating an undifferentiated pot....
• Inflation, in household terms The rate at which prices rise, which means the same rupee buys less over time. It is why money left idle loses value, an...
• Real vs nominal returns Nominal return is the number quoted. Real return is what remains after inflation. A 7% return with 6% inflation is a 1%...
• Old regime or new: how to think about it India offers a choice between a regime with deductions and higher rates, and one with lower rates and almost no deductio...
• Advance tax for freelancers Tax paid in instalments through the year by anyone whose liability is not fully covered by TDS. Missing instalments attr...
• House rent allowance A salary component that is partly exempt from tax for employees who actually pay rent. For renting households under the...
• The 80C deduction, in outline A deduction under the old regime covering a set of specified investments and expenses up to an annual cap. It shapes whe...
• Capital gains when you sell property Tax on the difference between the sale price and the acquisition cost, with the treatment depending on how long you held...
• Teaching children about money Giving children practical exposure to earning, spending, saving and waiting, at an age-appropriate scale. Financial habi...
• The annual financial checklist A once-a-year review of everything that quietly drifts: cover, nominations, allocation, goals and the actual savings rat...