The bulging purses

The bulging purses : The purses of over 5 million Central Government employees are quite heavy and bulging out now. There’s lot of money with them, with the wind fall gains following the 6PC implementation.
As in last time (in 1997), most of these huge amounts (received as arrears) will land up in the consumer durables market. That’s exactly why most of those companies are vigorously in the market with attractive schemes and offers ( Navaraathri is just another added reason).

Experts on Personal Finances have a piece of advice to these new millionaires - “Caution …. before spending all your money on cars, TVs, and PCs; keep in mind the future value of money”.
Here are the important DOs and DON’Ts, (on how to spend your arrear amounts), these Experts suggest.

1. Keep 3 months (household) expenses aside for contingencies.
2. Pay-off Credit Card dues, and personal loans (if any, in full).
3. Prepay Home Loans (if any), as much as possible.
4. Take a Medical Insurance (if not covered by other schemes).
5. Make a Mutual Fund deposit (may consider the Tax gains too).
6. Please don't forget a sacred act .. CHARITY. Contribute your might.

DO NOT park your money in Fixed deposits (or in SB accounts) , as you will most probably end up in a loss, accounting for inflation.

Regarding the increased monthly salary, experts suggest that only a part of your raise be used for household expenses. The balance amount (of your increased salary) should be put in a recurring deposit or SIP into a suitable Mutual Fund.

Retired Employees also would get their revised increased pension. The arrears and the increased monthly pension should be dealt carefully and wisely ( Remember, hard times are ahead, it looks ). You can’t expect any raise in your pension , in the near future (for another 10 years !).
Retired persons should consider regular expenses (going up always) , contingencies (any time guest, uninvited !) and growth of capital (to beat inflation).

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