Last update08/06/2018


Finance (102)

Life as an expat can be challenging enough. Especially finding a suitable, pocket friendly accommodation can be a herculean task. And it gets harder when you have room mates who are non-cooperative and who do not pay their dues on time. Returning back tired from work, only to have unpaid bills stare at you, even though you have paid your share, can be really stressful. With the rising real estate and rental costs, itÔÇÖs not easy for you to just move out and find a new place.

So youÔÇÖll have to come up with methodologies or techniques to split the bills effectively among your roommates. Here are our tips!

Have the talk

Schedule time with your roommates and talk to them about the house bills. Explain to them the need for all of you to share and pay the bills on time. Ask their suggestion for setting up ground rules for the house. Segregating between bills youÔÇÖll have to share or pay individually is very important. Sort out mechanisms for splitting and paying the bills each month. Discuss everything right from personal space to financial aspects such as rent, utility, grocery and potential maintenance fee.

Put them in writing

Create a spread sheet, jotting down all the points of discussion. Make sure that you enter details such as due dates, amount owed, and the person responsible for paying the same. Write down who will give the final cheque and when others will pay their shares. Circulate a copy to all your roommates, so that they are not taken by surprise when the bills arrive. This will also keep your roommate from denying later on to what he/she agreed about earlier.

Splitting Bills with Friends

Use mobile apps

Today everything is possible with mobile apps. If you find it difficult to remember, monitor and communicate expenses, you can always make use of free mobile apps such as Acasa, Unbill, Venmo, Splitwise etc. They are easy to maintain and helps you have all money details at the tip of your finger anytime.

Choose the right roommate

This is a crucial step while choosing your accommodation option. Pick the right roommate whose is gainfully employed, doesnÔÇÖt matter whether he/she is a close friend or a perfect stranger. During initial conversations look for subtle slippery signs such as tales of lottery wins, refusal to take work from a person who he thinks is "beneath" him, or how he is financially dependent on his parents even after he reached adulthood. Avoid staying with such people.

Stand firm

Stick to your guns and donÔÇÖt accept excuses every time your room mates delay or refrain from contributing their share. However you can be flexible if your roommate had an excellent track record in making earlier payments. Never fall into the guilt trap of making your friendÔÇÖs financial problem yours.

Communicate clearly

Have an open communication line with your roommate to ensure that every expense is paid on time. When unexpected expenses arise, such as an extended stay of a common friend or a big renovation requirement, make it a point to talk it over and decide how the bills will be split amongst yourselves.

So follow the above mentioned tips and youÔÇÖll find staying with your roomies to be a financially hassle free experience.

Increasing monthly bills burn more than just a hole in your pocket. The ripple effect that these excessive bills create, causes so much distress in your interpersonal relationships and health. Such prolonged stress increases the risk of killer conditions such as heart attack, diabetes, depression etc. So the sooner you identify the trigger behind high bills and devise solutions to mitigate the same, the better it is for you!

So here are ABCDs of what you must do to avoid financial stress, when the bills exceed your income!

A- Analyse

Look at cash inflows and outflows. If your expenses exceed your income, it means youÔÇÖre having a negative cash flow, which is not a good sign. Now you need to assess your assets versus liabilities position. This way you can analyse your net worth, which is the difference between total assets and total liabilities. This figure is actually a measure of your wealth, and should be on the positive side, where the assets exceed the liabilities. Analysing the cash flow and net worth statements can give a clear idea of where you stand financially. You can also run through a quick financial SWOT (Strength, Weakness, Opportunities and Threats) analysis to understand where youÔÇÖve been going wrong.

B- Break down

Now that youÔÇÖve analysed your financial position, you must break down the cash flow, net worth and other numbers to specific categories. Look at how much you are spending on categories such as housing (mortgage/rent, real estate taxes), utilities (water, power), food, clothing, healthcare, donations/charity, savings and insurance, entertainment, transportation (car payments, gas, service), debt payments and other miscellaneous expenses. Find out where youÔÇÖve been over spending.

ABCDs Financial Stress

C- Cut expenses

Here lies the biggest challenge! Cutting down expenses is not as easy as it sounds. It takes a lot of grit, self-control and resilience to do so. The first step in cutting down expenses is redefining necessities. Is it a necessity to buy the latest iphone model or to stay in the existing 3 bedroom apartment? You need to be absolutely honest with yourself to segregate wants from needs. Then go ahead and cut down unnecessary spending. Devise an austere spending plan and budget, and ensure you stick to it!

D- Decide on a plan

Create a rewarding downsizing plan that prevents you from spending money, at the drop of a hat. Make it more engaging, by challenging yourself into seeing how long you can go about curbing your urge to spend money. 

Now that you are equipped with the ABCDÔÇÖs of money management, get some rest and stop worrying about the expenses exceeding your income!

Say hello to unified, transparent GST!

Tuesday, 11 September 2018

Perplexed by the hubbub surrounding Goods and Services Tax (GST) in India? Wondering how it would affect your family back in India?

Well there is no need to sweat. WeÔÇÖll help you gain a good understanding of what GST implementation would mean to you and your family.

WhatÔÇÖs GST all about?

Welcomed as a great step by Team India, GST is all about ÔÇ£one country, one taxÔÇØ system. It is to replace more than a dozen indirect taxes at both centre and state level, while unifying the $2 trillion economy and 1.3 billion people into a single market. Implemented from 1 July 2017, this unified transparent tax system is for the bigger cause of transforming India into a corruption free strong economy, reducing black money and gaining significantly higher tax collections.

HSBC estimates that in the long run, this new GST reform will add about 40 basis points to India's economic growth. In fact this new implementation will help boost the ÔÇ£Make in IndiaÔÇØ campaign. There will be free flow of goods and services across states and union territories with no unnecessary checkpoints. This efficient neutralization of taxes will make our products more competitive in the international market and give a boost to Indian exports.


What are the types of GST collected?

Going forward, India will be levying 3 types of GST:

  1. CGST- Collected by the centre 
  2. SGST- Collected by the state [including union territories with legislature] 
  3. UTGST -Collected by union territories without legislature 
  4. IGST- Collected by the centre on inter-state sales

Who has to pay GST?

Manufacturers, sellers and service providers are the ones who will have to pay GST directly to the Indian Government. However as consumers, we will have to bear the tax amount while purchasing goods and services.

What does it mean to common people?

At the outset, the common man will experience some reduction and increase of prices here and there. ItÔÇÖs great news that several basic necessities are not taxed under GST. Food grains, cereals, pulses, milk, butter, curd, vegetable, salt, fish, and poultry products such as chicken and egg etc. are few items that will see a 0% tax levy on their non-branded counterparts. Hotels and lodges with tariff below Rs 1,000 will also have no tax.

All other items will be taxed under four main rate bands such as 5%, 12%, 18% and 28%, irrespective of the location of purchase. However gold and rough diamonds do not fall under the current rate slab and will be taxed at 3% and 0.25% respectively.

How it could affect NRI investments?

ÔÇ£The NRI investments in India are expected to touch $11.5 billion this yearÔÇØ, according to a report by Square Yards, an Indian real estate firm focussing on NRIs. Yes, the transparency in the tax regime is likely to attract more Foreign Direct Investment (FDI) and cause a boom in the real estate and gold market in India. The cost of properties may also come down due to this uniform taxation. If need be, NRIs may be able to claim the GST refund, thereby making their purchases in India cheaper.

Managing change is always a challenge, especially in a country with 29 diverse states, cultures and sentiments. Hence letÔÇÖs keep our fingers crossed and watch how the GST implementation unfolds!

Is your debt burden growing heavier and heavier because of your credit card bills?

Credit cards can be a double edged sword. It takes you into the luxurious world where you can spend the money you never owned. However at the end of the month, you are expected to pay for your splurging with exorbitant charges.

The worst part is that if you are unable to pay off the bill, the credit card company gives you the option of securing another credit card, taking fresh loan, converting dues into EMIs or liquidating investments to pay for the existing credit card. So, instead of solving the debt crisis, these steps take you deeper into the vicious debt cycle.

However donÔÇÖt worry. We have three tips handy that will help save you from credit card debts.


Avoid minimum payment

When you run short of cash, the option of making a minimum payment certainly sounds tempting. But you have to remember that this minimum bill payment is only a seemingly temporary relief. Infact it prolongs your repayment period, and unless youÔÇÖre using a credit card with 0% Annual Percentage Rate (APR), you are very likely to pay more money over the extended repayment time. Also high outstanding credit card balances can badly damage your credit score. So always pay the credit card bill in full.

Never miss a payment date

If you do not pay your credit card bills on or before the designated due date, you will have to deal with high late payment penalties. Remember that if the payment date falls on a public holiday, you should ensure you pay well before the date. In case you miss the payment day, immediately notify your credit card company and never wait until the next monthÔÇÖs due date to make up for the missed payment. This too will damage your credit rating.

Refrain from cash withdrawal

Credit card cash withdrawals or advances garner exorbitant charges from the service provider. This is a serious debt trap you must avoid. If you still need to withdraw cash, use multi currency travel cards that have no or very less ATM withdrawal charges.

You must use credit cards only if you are comfortable repaying the whole amount at the end of the billing cycle. Or else you must use prepaid multipurpose cards that have all the features of credit card but without inflated charges.

Simple Tips to Save Money!

Tuesday, 25 April 2017

Smart savings IG V05 2

Getting competitive, best exchange rates can help save you a lot of money. Whether you are a tourist, expat, financial trader, or businessman, it is very important to know how to forecast the exchange rates, to minimise risks and maximise returns.

Exchange rates are linked to global markets and they change on a daily basis. While predicting their exact rate with accuracy is not possible, you can to a certain extent forecast its direction by understanding the following.

Purchasing Power Parity (PPP)

Purchasing Power Parity is an economic theory which works on the principle that identical goods in different countries should have identical prices. For e.g. if a pair of Nike shoes costs X dollars in a particular country then it has to cost the same X dollar in a different country after the currency conversion.

The Economist Magazine has a fun way of predicting the exchange rates called the Big Mac Index. This index considers the cost of the Big Macdonald Burger in different countries to predict the exchange rate movement. Consider the present scenario; one USD is equivalent to 3.67 AED currently. In future if one Big Mac Burger were to cost one dollar in USA but the same burger is costing 4 AED in the UAE, then the rule says that the AED will depreciate in the long run to 4 AED per dollar.

Forecast exchange rates


Relative economic strength

If the economic strength of a nation is strong (like strong growth rate, manufacturing sector growth, low interest rate etc.) then the global investors would want to invest in these countries via their financial markets through stocks, government bonds etc. When there is a demand from global investors the currency would appreciate. This rule is a good predictor of the overall upward/downward trend of currencies.

Financial models

If you are a financial investor looking to make money from exchange rate fluctuation then you can use econometric models which take into consideration different parameters like GDP growth rate, interest rate, inflation etc, and assign them particular values to build an equation around them. This helps get an exact number for future exchange rate.

Time series model

This method is purely technical and is not based on any economic theory. A popular time series approach is called the Autoregressive Moving Average (ARMA). This method is based on the idea that past behaviour and price patterns can be used to predict future patterns. All it needs is a time series of data which can be fed to the computer.

Another easy way to avoid the exchange rate fluctuation is to use a travel card that lets you lock in exchange rates when they are favourable. You can use the locked rates later, when the currency rates head in an unfavourable direction.

Dealing with the everyday challenges of money management is hard enough in your home country, where you generally understand most financial concepts. Imagine doing that in a foreign country with different rules and regulations and an unknown language!

The top three financial challenges faced by expats are:

  1. Finding optimal money transfer services
  2. Understanding the tax laws of the new country
  3. Obtaining loans or credit cards

Money Transfer

When you move abroad and begin your expat life, one of the biggest challenges you face is to find the right way to send money back home. International money transfer can be tricky! Some of the problems you need to deal with are high transaction fees and fluctuating currency rates.

However all of these issues can be easily sorted out by selecting a reputable and dependable money transfer service that can help you transfer money instantly and also provide you with the most competitive exchange rates thatÔÇÖs definitely cheaper than banks!

Financial Challenges of an expat


Dealing with taxes is complicated and the paperwork associated with it is vexingly difficult. Living in a new country means you need to now get used to a new system. In order to understand the new system, ask these questions upfront.

  1. What will I be taxed on?
  2. What are the documents required?
  3. Will I be taxed on my pension?
  4. Whom do I liaise with?

Expats also face additional reporting requirements, including reporting any foreign bank accounts, any non-residential country mutual funds, pensions and investments. Several tools and apps such as IRS2Go, My Bock Ask a CPA etc. are now available which can help you compute your taxes and you can also avail the services of a financial advisor to help you out.

Obtaining Credit

Most countries require you to have a good and healthy credit record in order to apply for loans or credit cards. However, when you move to a new country, you realise that you donÔÇÖt have a credit history which makes it difficult for you to obtain a loan. What you can try to do is, provide a record of your credit history from your home country. But that might not be accepted everywhere. So, the only solution is to build your credit record from scratch. Pay your bills on time, keep your debt low and avoid opening too many bank accounts.

Most of the time, the problems youÔÇÖll face as an expat will be due to the fact that you are not familiar with all the laws and fine-print. So donÔÇÖt hesitate to ask for help!

Being smart with money and understanding interest rates is very important in todayÔÇÖs world. Astuteness is required not only in calculating interest amount you have to pay. You also need to know how to save and make money leveraging them!

Not able to understand? Here you go.

Interest rate is the price of money. It could be a profit you earn from saving or investing. It is also the cost for borrowing cash. Usually interest rates on savings account/other investments is lesser compared to interest rate you pay for taking a loan. This differential is how the banks earn money.

These rates can be your worst enemy if you havenÔÇÖt understood the concept correctly. Here are four points that will help you appreciate interest rates better!

Interest rate varies from bank to bank

Do remember that interest rates vary from bank to bank. The rate you would pay on your home loan from one bank might be higher or lower compared to a different bank. Make sure you do a competitive analysis among various banks to understand and choose the bank which provides the most competitive rate. This is applicable not only to bank rates but also to credit card rates. Hence make sure you always deal with authentic money advisors who can help you find the best rates.

Interest rates

Types of interest rates

Loan rate can be of two types: fixed and variable. The fixed interest rate is constant for the duration of the loan. But variable interest rate fluctuates based on the market forces. If you are regularly tracking financial markets and macro indicators for your country you would understand variable rates better, else we recommend you to choose a fixed rate of interest.

Higher the inflation, greater the interest rate

Inflation is the rate at which the prices of daily commodities like petrol and groceries increase on monthly/quarterly basis. The higher the inflation rate, the more the interest rates will rise. This is because the purchasing power of money gets reduced when there is increased inflation. Thus the cost of producing and procuring goods increases. Hence people and companies tend to borrow money which increases the demand for loans. This causes banks to increase their interest rates.

Be aware of concession schemes

Concession schemes for women borrowers and senior citizens are offered by many financial institutions which helps save substantial sum on the interest rate. Always enquire, invest or borrow from such schemes.

As consumers we should have complete understanding about interest rates, as it has the potential to save and make a lot of money.

Any idea which is the easiest, convenient and cost-effective way of sending money?

Of course itÔÇÖs online remittance! You can transfer money at the click of your mouse, right from where you are, anywhere and anytime.

So how do you transfer money online?

In this article, we will take you through the step by step procedure to send money successfully. Make sure you go through secure and trusted money transfer provider, to get the most competitive rates.

Step 1 - Sign up to create your user id and password.

If you are a first time user, you can sign up within minutes by providing your basic details and you will be given your user id and password. If you are just testing the waters, you can also skip this step and choose to be a guest user.

Step 2 - Sign in to your account

Using the user id and password, you can sign in to your account. Once you sign in, you will find a summary of your account along with an option to send money. Click on to transfer money.

online remittance


Step 3 - Add/select your beneficiary account number

If your beneficiary is already added then select your beneficiary, else you will have to set up account by entering the beneficiary account details and SWIFT code. The SWIFT Code is a standard format for Business Identifier Codes (BIC) and it's used to uniquely identify banks and financial institutions globally - it says who and where the recipient is.

Step 4 -Enter the amount to be sent

Choose the amount of money you want to transfer. You will know exactly how much money your beneficiary will receive, by subtracting the agency cost from the amount using the accurate exchange rate.

Step 5 - Confirm the transaction

Finalise the transaction by clicking ÔÇ£confirmÔÇØ or ÔÇ£make paymentÔÇØ button.

Step 6 ÔÇô Track your payments

You must be able to track your transaction online, till the time money reaches the hands of the beneficiary. ItÔÇÖs that simple.

Gone are the days when it will take a fortnight or more to send money home. Now with the click of button, money can be transferred online. So what are you waiting for?

An entrepreneur is someone who jumps off a cliff and builds a plane on the way down! Leaving your job and embarking on your dream entrepreneurial journey is never easy. The self-employed people usually face several financial challenges, as their income may not be as regular as the salaried class. At the risk of sounding pessimistic, here is a popular stat.ÔÇØ50 per cent of enterprises fail within the first year, and 95 per cent, within the first five years!ÔÇØ

So all you have to do is, develop a fool-proof financial system around you. Here are just 2 things, you need to focus on.

1. Diversify

Placing funds across other side businesses, alternate investments, or by just setting aside reserve cash, you will give yourself the much needed breathing room. This is help you operate independently with consistent growth and more exciting opportunities. For beginners, first open and maintain the following bank accounts:

Tax account: If you are drawing money from your venture or if you are reinvesting your income, in either case tax needs to be paid, and this is higher than what you used contribute as a salaried employee. Keep this portion aside every month for your tax obligations.

Retirement fund: While you may feel you can continue working forever, destiny may think otherwise. Hence, set up a retirement fund.

Saving and Investment account: While saving and investment is a must for every individual itÔÇÖs of paramount importance for an entrepreneur. Smart investment decision can secure your future and help you build your business even further.

Buffer account: This account should only be touched during rainy days, as it will provide the blanket of security every self-employed person needs.

However ensure that your business and personal accounts are maintained separately, as it will help you save money for yourself and not lose it all in the business.

personal finance for self employed

2. Simplify and digitise routine bill payments

As a self-employed individual, time is of utmost essence to you, tasks that could have been handled easily when you were salaried seem difficult now as you are always racing against time to get your work done. Automating and securely digitalising wherever possible is crucial. Let the digital forces take care of utility bills, telephone bills and renewal of all your business related subscriptions. Ensure all these bill payments are made through one reputed money transfer provider who offers many convenient and accessible ways to pay your utility, insurance or subscription bills.

A little bit of planning combined with a viable spending strategy will make sure that your business can endure any possible lows and make the most of the highs. You may miss the stability of working as a salaried employee, but if youÔÇÖre smart, you can have more stability all by yourself!!

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