All posts tagged: tax tips

Common Money Management Mistakes Fresher’s Commit in their Early Years

keep-calm-and-save-money-39

While you are young, you do not really realize the role that money plays in your life in latter stages. So it becomes imperative to realize that there is a balance in money management that we need to attain.

Just entering into the shoes of an employee makes you see the world with a different view altogether. You have a different take on everything. Stepping out of your comfort zone to a ground of exposure makes you cringe with anxiety at times. Because financial responsibility now is yours to take care of.

We want to list down some basic yet important thumb rules that you should follow at early stages to plan better in finances.

  • 1. Keep a check on your purchases: Money is yours. Direct your expenses and control your money. Do it either the offline or online way, but do it. Try your hands on excel sheet, or manage money with one of the money management apps. It makes life easier with lesser roadblocks. Be systematic, and assess the costs that spread across areas of essentials and non-essentials.
  • 2. Always build some emergency fund. It is imperative for us to have some financial aid, in case of an emergency. Try keeping aside a small portion of your savings for this section. Parting away from money is painful, but this money will be your friend in need during the unavoidable crisis
  • 3. Steer clear of debts: Debts do become our part of lives, at some point or the other. But it is necessary to keep a check on the debt pile. It should not accumulate enough to push us in the debt trap. Be wary of what you borrow. Borrow but repay on time. Don’t be habitual in using the credit card every now and then, if you cannot repay on time. This just builds pressure that is uncalled for.
  • 4. Shake hands with Tax management: Even though you are in your primitive years of earning, tax management is an art to master. The sooner you come to terms with it, the better it is for your later life. Evaluating the money that gets pumped in by tax machines, helps us to list better our expenses for duties , necessities and obligations.
  • 5. Resort to common sense and practicality: Be pragmatic about your needs and wants. For example wait for a while till the gadget in your wish list becomes cheaper instead of buying it right away. Opt for facilities that are free, instead of going out of the way to splurge on non-necessities. This does not imply that you need to compromise on your basic needs, but this just means that avoid extravagant expenditure. Especially the one that is easy to evade.
You have just embarked upon your professional journey, and we would want to wish you luck for all your endeavours. We want you to enjoy, learn and grow more to become financially able and stable. Happy Earning!
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All posts tagged: tax tips

Money Management Apps

Money Management apps

Who doesn’t want a peaceful night’s sleep? But we do not always get what we want. We know for a fact that money matters, but money matters hound us in our sleep.

We have to essay the role of a smart money manager. Balanced budget is a must. But it is not as easy as it sounds. With our minds and finances in multiple places, it becomes formidable task to keep a track of money.

Going through uncountable paperwork and doing mathematics on the receipts is a cumbersome task. This leads to a haywire budget management, and we dread the day of budgeting.

The ultimate resolve to this is going digital. Technology has embedded deeply in our professional and personal life. And it is Technology that helps us solve most of the obstacles in our lives.

The tech masters have devised several apps that aid in budgetary planning, and taking smart financial decisions

We will list down some of the coolest money management apps that fix the financial fixes.
  • MTRAKR – This app helps in managing wealth and keeping a track on what we earn and what we spend. And as the name suggests, the tracking system here helps us to get rid of extensive paperwork. You don’t have to fret over having more than one bank account. This helps in managing multiple bank accounts. It is built beautifully, and has segregated categories of food, utilities etc. People with no finance background or zero bank knowledge can also tap this app with ease. It is fully automated and does not ask for any sort of bank passwords.
  • My Tax India – Calculating and saving tax, taking into account investments and other deductions is a complex task. Here is where My tax India becomes your saviour. It systematically calculates the amount of tax that you need to pay, and you can try out various settings to figure out the optimum level of investment that we need to make. It is user-friendly, and you do not need to be a maestro in finance to use it. So, at the time of tax filing you know what to expect, and you act accordingly. Otherwise you are left baffled with very less time to think through.
  • Wally – Wally is another expense tracker in the digital arena, it keeps a check on your expenses and keeps the spends stacked in categories. One very interesting feature is that it uses your location and categorises the venue, leaving you with very little work. All you need to do is fill in the expenses. Another feature is it’s ability to scan the receipts, relieving you of the stress to type in financial details . You get notified every time you reach a savings goal. Money Management is a much easier task now. We can direct our expenses accordingly.
  • Mint – So Mint basically integrates all your card and bank accounts while keeping an eye on your earnings, spends and savings. This gives in an in-depth analysis of your finances. This is one of the coolest Money Managers in the digital space.
  • Officetime – This is an intriguing application. It is for office goers for whom time is money. It helps you in analysing how productive your time is, and how you can use it more efficiently. This also helps you keep a track on your spends, and generates invoices for expense reimbursements.
  • Homebudget– As the name suggests this application apart from having a beautiful look and feel, creates a beautiful balance in the finances for your family members. It helps you to split bills with your spouse or family members by coordinating efficiently . It also helps working professionals to keep a tab on their multiple income sources.
  • Splitswise – You like going out, partying, or having dinner with your friends? Then this is the app apt for you. This is extremely useful in splitting the expenses. Splitswise, divides the cost systematically if there is a group with joint expenses and it gets tough to split expenses. This is a user-friendly app, and is very popular amongst youth.
  • Digilocker – This app is extremely handy to align and stack your financial documents Starting from your PAN card, Income Tax returns to other Bank documents, Digilocker manages all the confidential documents in an ordered fashion In short DigiLocker acts as the superhero in disguise.
So what are you waiting for? Tap the app that suits your needs.
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All posts tagged: tax tips

Wise Investment

wise investment

Investing your hard earned savings seems a difficult task , but in reality it is not. You you don’t have to be rich to start investing. The key principle is to Start small and start early.

If we focus on the right path to investment, then we would be amused to see the amount that we save in a very short time. It is mind-boggling to see everyone around me spending a considerable time before buying a mobile phone, car or even grocery. But when It comes to investment , the most significant decision of our lives(financially), we just go about it without giving much thought to it.

Hence we want to talk about how investment can be prioritised in the right fashion, and we have the following to explain just that.

7 pillars to build a wise long term investment portfolio:-

  • 1. Put up a road map together: and answer two significant questions: a) How long do want to remain invested for? b) What’s your risk appetite?
  • 2. Diversify your investments: The investors falling in the category of high risk takers, also plan investment by diversifying their portfolio. This is important not to invest everything into a single basket or instrument class.
  • 3. It is imperative to Plan for long term and avoid the temptation of short term gains.
  • 4. Never invest in something that you do not fully/partially understand. Research well to understand and then invest accordingly.
  • 5. Invest to save tax : You can save tax by investing under section 80 C. The maximum amount that can be invested is 1.50 lakh, and this means your income gets reduced by this investment amount. So you are exempted to pay tax on this amount. Also the invested amount increases in a period of time. So it is a win-win situation for you.
  • 6. Investment should be your first priority, and it should begin with the initial sum of money, and not with the leftover amount. Practicing this as a habit will help you clearly evaluate the difference, and you will be surprised to see the funds that are actually available for you to spend.
  • 7. Every Rupee costs: don’t let go off a single rupee. Do not fall fall pray to exotic schemes and keep your portfolio very simple. Try to look for the extra yield that many banks offer such as the superior returns on saving as compared to others that don’t. Saving is as simple as spending. If you intend to do it then just follow it like you follow your daily rituals.

We are listing down some wise saving options for the young working population:

ELSS: (Equity Linked Savings Scheme) is a diversified equity mutual fund which is qualified for tax exemption under section 80C of the Income Tax Act. ELSS is a good option to invest in, because the investor has the opportunity to invest in equity markets as well apart from getting benefits of tax deduction. Also, ELSS has the shortest lock- in period of three years as compared to other tax saving options.

Mutual Funds: Mutual funds are diverse in nature.. They are broadly divided into Equities, Debts and Balance funds. Here the money is pooled in by investors in many bonds, stocks and other types of investment. It also gives you the access to investment professionals who expertise to manage your funds in the best way possible So owning shares in a mutual fund instead of owning individual stocks or bonds the risks get spread out. Diversification ensures that a loss in a particular investment gets nullified by gain in another

ULIP’s: ULIP or Unit Linked insurance plan is a life insurance product that provides the risk cover to the policy holder accompanied by the option to invest for long term. Recurring Deposit : The concept is fairly simple. You can allocate a fixed amount of money every month as deposit with a bank for a period that you specify. This will push you to save and invest on regular basis thus securing your future.

PPF :- The Public Provident Fund has been established by the central government. Any individual can open a PPF account with any nationalised bank or its branches that handle PPF accounts. The minimum amount to be deposited in this account is Rs 500 per year. The maximum amount you can deposit every year is Rs 100,000. The entire balance can be withdrawn upon maturity i.e after 15 years of the close of financial year . The rate of interest is decided upon the government every year. Currently the rate of interest and principle is exempted from tax at the time of deposit and withdrawal.

We hope that this article helps you out in thinking better and planning wisely. Happy Investing!

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All posts tagged: tax tips

How to come out of debt trap ?

Debt Erased Acknowledging that you are over leveraged is one of most important steps to get debt free. If you understand your finances, you will learn to manage them better. We have all gone through phases in life when we release that we are spending more than what we are earning and its important we understand this and take steps to manage things better. Understand your debt: I have learned to split my debt into 4 parts
    1. Revolver: high cost debt usually linked to credit card spends or cash loans where interest loans are too high and not paying on time results in multiplier effect on outstanding.
    2. Live life debt: EMI loans linked to buying products or holidays. This type of debt is usually not visible as it gets camouflaged under subvention or supplier funding.
    3. Asset class debt: long term loans of cars and homes.
    4. Liquid class debt: using asset class products to take a loan like Gold loan, loan against property.
Some board thumb rules:
  • your loan amount should never be more than 8X your annual salary.
  • Revolver loans should never be more than 50% your monthly salary.
  • Total EMI should not be more than 50% of salary

Quick solutions to reduce debt burden:
  • 1. Balance transfer: Banks offer to people with large outstanding the option of balance transfer from one credit card to another. You can opt for a fixed duration balance transfer(3-12months repayment), in such transfers interest rates are usually 9 – 15% depending on your bank. Some banks also offer a ‘Lifetime duration’ option to make the repayment, though interest rates can be much higher (12-24%). Please note banks also levy process fee, which usually is 2% of the outstanding amount. After the bank verified your details, they will send you the cheque on the demand draft in favour of your existing credit card that you can use to repay.
  • 2. Converting outstanding balance to a EMI: usually if the net outstanding across credit cards is too high I will suggest you can take a small personal loan and repay your credit cards. Please note credit card debt comes at above 2% interest per month (36% – 46% per annum) and also attaches service charge while a simple personal loan will cost between 12-16% per annum.
  • 3. Negotiating lower interest rates with existing bank/institution or look at loan transfer: most institution allow some amount of negotiation usually linked to a bullet payment.
  • 4. Salary cover to paying credit card outstanding : usually credit card outstanding can be managed by paying over two salary cycles and managing funds better. Pay day or bridge salary loans like EarlySalary can be very usual in such stages.
  • 5. Loan against FD’s or Gold Loan: loan against asset comes at much lower interest usually loan against FDs come at 2-4% while Gold loans come b/w 4-8% per annum and thus are very good way to reduce debt burden.

Simple life rule to manage finances be save 30% of salary and don’t leave more than 25% in EMIs.
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All posts tagged: tax tips

Save your neck! Save your tax!

savetax Often it happens that salaried people end up paying more tax than actually needed. This happens mostly because of lack of knowledge about tax saving. If you feel that you have a similar story and are figuring a way out to reduce the tax burden, then this article is for YOU… Indeed, there are many ways; you can save tax while you are earning your salary. Here are 5 simple and legal tips to save tax. (more…)