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Every year, many advertisements appear just before Mother’s Day regarding financial gifts that you can give your mom. Financial instruments like SIP (systematic investment plan) or insurance policies are typically recommended, among others. Most advertisements exhort children to set up a SIP or buy health insurance for the mother as she may not be financially literate. (How do these advertisers assume that the kids know any better?)

But mothers do not need someone to set up everything for them. Remember, your mother is the one who taught you so many new things. She cleared your trigonometry or biology doubts when you needed help with your studies.

Instead, what you can do is tell her to think more about herself. It is a well-known fact that women, especially mothers, put everyone and everything before themselves. Their needs and wants are the last priority in many households.

A ME FUND

The first gift you can give your mother is a ME fund. A fund where she saves, or she is gifted an amount that can be used by her the way she wants. This fund is for anything she desires. This is a fund where she decides on her own where the money goes and how it is used. The idea of the ME fund is to make her feel that she can achieve anything she wants. If you gift her a SIP, she doesn’t have a say in it and will not have that sense of liberation.

The ME fund would keep your mother committed towards reaching her aspirations and would augment her money management skills as well.

The choice of investment in this fund should be left to her. Why foist your beliefs on her? At best, you could guide her on investments like mutual funds, which she may not have invested in.

Provide her resources like an e-learning programme (parents are still keen learners and have a better attention span!) or a book that can give her basic knowledge on money management.

Along with that, a subscription to a business daily, which has a personal finance column (like Mint), would help her stay updated. People from our parents’ generation are avid readers and would not waste the subscription.

More importantly, motivate her to grow this fund. This not only means reiterating that she can manage the fund (even if she may not have managed finances in the past) but also push her to take some risk with the investment. After all, nothing great comes without risk.

Do not forget the golden investment rule—simple and low-cost products work best in the long term. As Warren Buffett says, “The best moves are usually boring." Imagine if you suggested Dogecoin, whose price moves on the utterances of a billionaire up 800% in a month and down 50% in a day and has an uncertain future; your mother certainly would never want anything from you for any of her special days!

A SIP in a balanced advantage fund or a basket of index funds across market caps is a good option for the ME fund. Stay away from any investment-linked insurance plans, especially capital-guaranteed insurance plans.

HEALTH INSURANCE

The second gift your mother certainly needs is a good health insurance cover. Women account for less than 20% of health insurance policyholders in India and they are dependent on their spouses for health expenses. However, women tend to have more ailments than men and have a higher life expectancy.

Families generally rely on health cover offered by employers, but it is advisable to take external covers early on to have continuous coverage.

A super top-up policy is a low-cost option for large health covers. Moreover, super top-up policies can be taken as standalone policies and do not have to be taken with a base cover. Super top-up plans come with deductibles of 10-20%. A deductible means the policy will pay beyond the deductible amount. The deductible will be borne by the policyholder.

A 10 lakh health insurance along with a critical illness cover of 5 lakh is desirable. The cost of a 15 lakh cover with 3 lakh deductible for a 45 to 55-year-old would be between 5,000 to 7,000 per year.

Of all the gifts that life has to offer, a loving mother is the greatest of them all. Give her a gift that makes her future happy and secure.

Mrin Agarwal is founder director, Finsafe India.

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