Strategies for saving more, buying insurance: Top personal finance stories
Our pick of best stories this week explains how get more from your salary and what your life insurance plan should do
 "Strategies for saving more, buying insurance: Top personal finance stories")
A recent report from the Reserve Bank of India (RBI) highlighted a dip in India’s household savings, which reached a decadal low of 5.1 per cent in FY23. This week’s lead story by Bindisha Sarang offers actionable strategies for individuals on how to increase their savings rate. Readers can learn to restructure their salary for tax efficiency, undertake smart budgeting, and automate savings to ensure their financial well-being.
Traditional plans, which are insurance-cum-investment plans offered by insurance companies, are difficult products for the layperson to understand. Sebi-registered investment advisor Deepesh Raghaw writes on why insurers must simplify these plans, and how they should go about doing so.
If you plan to take a personal loan, consult Paisabazaar.com’s comprehensive table detailing interest rates and processing fees. By doing so, you’ll gain a clearer understanding of the potential costs associated with each lender, ensuring you select the most attractive option.
If you have a three-four-year investment horizon, consider investing in a medium-duration duration fund. Do look up Morningstar’s review of HDFC Medium Term Fund.
NUMBER OF THE WEEK
Household savings rate: 37.6% of GDP. Credit offtake data indicates that households have been borrowing at a higher pace. The stock of household debt went up to 37.6 per cent of GDP in 2022-23 from 36.9 per cent in the previous year. One reason for higher borrowings by households could be that they may not have fully recovered from the income setbacks suffered during the pandemic. Sustained high inflation (which would have affected the savings rate) would also have played a part, forcing households to borrow more.
Households must create a budget, identifying opportunities to save and repay their loans. Those who have taken a home loan should try to prepay at periodic intervals and reduce the principal.
Those who have credit card and other high-cost debts should list all their loans in descending order of interest rate. They should then try to pay off their highest-cost loan first.