It is said that money makes life simpler. But when it comes to manage that money people just run away. There are a few tasks - like evaluating a stock that needs deep understanding and specialised skill - to achieve effective money management. However, there are a few other simpler tasks which everyone can follow.
These tasks may appear hard on the outside but are quite simple if one understands the basics behind them. Once you understand these basics, you can start practicing them right away.
It is our attitude at the beginning of a task which - more than anything else - impacts its successful outcome.
Let's take a look at a few such tasks:
1. Budgeting
"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. There are a number of books, blogs and tutorials to help you learn this concept thoroughly. Also, there are numerous websites which will provide you with every detail of budgeting. But take a minute and think: do you really need a book/website for creating your own budget?
For creating a budget, you first need to have an income vs. expenditure list in your hand. Add all the details in a spread sheet and see if the money going out is more than that coming in. Once you learn to tally this, you can add things like setting financial goal and so on.
To project your expenses for future, you can take clues from your past expenses. For this, you may need to refer to your old bank statements and credit card statements. Also don't forget to add annual expenses like car insurance, property tax, festival expenses etc.
2. Taxes
The common notion that 'the hardest thing in this world to understand is income tax" is a wrong one to have. Many think tax planning and tax filing are complicated things and that we need to have more knowledge to do so. This is not so true.
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.
Nowadays, you can file your income tax return online. The process is quite simple 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.
Here are a few points to remember for achieving this:
If you have not created a will so far, create one now. List down all the assets - movable, immovable, financial and so on. 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.
Conclusion
There is no complication in doing these tasks. The complication is there only in our mind. These basics will help you understand and perform these tasks much more easily. Make use of these smart and handy tips to simplify seemingly complicated financial tasks.
These tasks may appear hard on the outside but are quite simple if one understands the basics behind them. Once you understand these basics, you can start practicing them right away.
It is our attitude at the beginning of a task which - more than anything else - impacts its successful outcome.
Let's take a look at a few such tasks:
1. Budgeting
"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. There are a number of books, blogs and tutorials to help you learn this concept thoroughly. Also, there are numerous websites which will provide you with every detail of budgeting. But take a minute and think: do you really need a book/website for creating your own budget?
For creating a budget, you first need to have an income vs. expenditure list in your hand. Add all the details in a spread sheet and see if the money going out is more than that coming in. Once you learn to tally this, you can add things like setting financial goal and so on.
To project your expenses for future, you can take clues from your past expenses. For this, you may need to refer to your old bank statements and credit card statements. Also don't forget to add annual expenses like car insurance, property tax, festival expenses etc.
2. Taxes
The common notion that 'the hardest thing in this world to understand is income tax" is a wrong one to have. Many think tax planning and tax filing are complicated things and that we need to have more knowledge to do so. This is not so true.
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.
Nowadays, you can file your income tax return online. The process is quite simple 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.
Here are a few points to remember for achieving this:
If you have not created a will so far, create one now. List down all the assets - movable, immovable, financial and so on. 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.
Conclusion
There is no complication in doing these tasks. The complication is there only in our mind. These basics will help you understand and perform these tasks much more easily. Make use of these smart and handy tips to simplify seemingly complicated financial tasks.
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