It is said that money makes life simpler!! However, when it comes to manage that money people just run –away from it. As far as money management is considered, there are a few tasks like evaluating a stock that needs deep understanding and a specialised skill. There are few other simpler tasks, which everyone can do.
At the outset, they may appear harder. However, they are simpler if you understand the basics and you start practicing it.
It is our attitude at the beginning of a task which, more than anything else, will affect its successful outcome.
“Every young man should have a hobby. Learning how to handle money is the best one.” Jack Hurley.
Budgeting, simply means being aware of where you are spending your money. If you want to learn about this concept then there are no. of books, blogs and tutorials dedicated to this topic. There are certain other websites also which freely guides you about every detail of budgeting. But take a minute to think, just apply your common sense. Do we need to refer a book or website for creating our own budget?
For creating a budget, you first need to have income and expenditure list in your hand. Add all those details in a simple excel file and see if the money going out is more than coming in. Once you learn to tally it, you can add things like setting financial goal etc.
To project the expenses for the future, you can take the clue from your past expenses. So you need to refer your old bank statements and credit card statements. Also don’t forget add the annual expenses like car insurance, property tax, festival expenses.
“The hardest thing in this world to understand in Income Tax” This is a wrong notion to have.
Most of us think, the tax planning and tax filing are complicated things and we need to have more knowledge to do so. Actually it is not so.
For a salaried person, tax planning is much easier. You need to pay close attention to your form 16 to understand more about where and how to save tax.
Now a days, you can file the income tax return online. The process is completely easier and user friendly.
3) Estate Planning:
Estate planning is nothing but planning about how your assets need to be shared between your legal heirs after your death.
- If you have not created a will so far, create one now. List down all the assets, movable, immovable, financial... Also decide which asset needs to be passed on to whom and mention that.
- Update all your investments and insurance plans with nominations and beneficiaries. You need to review this periodically.
- Make sure the nominees or beneficiaries registered in the investments and person to whom you want the proceeds to go after your death needs to be same. This will make the entire asset transmission process easier.
Estate planning will help your legal heirs to get the transmission happen not only faster and also makes sure the transmission happen without a conflict.
A best estate plan is the one which will not leave the heirs with conflict, confusion and cost.
There is no complication in doing these tasks. The complication is there only in our mind. So if we could remove that, these tasks will become simpler. In short, make use of these smart and handy tips to simplify seemingly complicated financial tasks.
The author is Ramalingam K, an MBA (Finance) and Certified Financial Planner. He is the Director and Chief Financial Planner of Holistic Investment Planners (www.holisticinvestment.in) a firm that offers Financial Planning and Wealth Management. He can be reached at firstname.lastname@example.org