Your Loved Ones May Not Know Where Your Money Is!

We discuss everything with our family, from our everyday routines to other important life choices. We listen to their opinions on things like when to schedule a regular shopping trip or where to go on the vacation next. However, most people don’t involve their family in one of their most important elements of life—their finances—and even when they do, they don’t go into good enough details. It’s commonly believed that talking to family members about money matters and decisions is unnecessary and may not lead to anything worthwhile.

Involving your family members in financial planning of the family and money matters will avoid any confusion and stress in case of any unforeseen contingency occurring in the family. It will also help you in keeping records of your investments and liabilities along with creating awareness amongst children and putting them on to the path of financial independence.

Make sure that everyone in your family, especially the spouse, other adults and older kids are on the same page when it comes to family’s finances. This might be useful if you get sick or have an accident. These are the times when someone else may need to step in for this purpose – you should try to make their lives as simple as you can in such stressful moments.

Discussing finances also addresses a big issue being faced by many families when the patriarch of the family passes away – of unclaimed assets of the family nobody has a clue of. On the contrary, when the owners attempt to claim their funds, they have to run through the gauntlet of tedious processes, tied up in complex red-tape. This problem can only be addressed through mutual and healthy discussions within family when the going is good.

(Contributed by Manish Kumar, Relationship Manager, Team Arjun, Hum Fauji Initiatives)

Have More Money in Your Hands With This Trick

Everybody always wonders where his/her earnings vanish when the full salary had been received and nothing out-of-the-ordinary has been spent!

In reality, what happens is ‘Love at First Sight’ with every single pay check. When it arrives, we often feel full of possibilities (😊), forget how hard we had to work to earn it and what all pending urgencies are demanding a share of it.

Budgeting, a very drab and boring exercise, is the only solution to this monthly money vanishing trick. It may appear difficult at first, but if you follow the steps listed below, you‘ll realize that it’s really pretty easy and will soon become a part of your routine when you see the benefits flowing in.

  • Know Your Income – Make a list of each source of income and how much you typically receive per month. Use your take-home pay rather than your pre-tax income. Try using an average amount if the amount you receive varies from month to month.
  • Determine Your Expenses – Count up the bills that have fixed payment amounts, such as your mortgage, your car, your insurance, or your student loans. This is also a good time to set up your emergency fund – pick a number to save monthly and factor that into this category.
  • Prioritize – Once you are aware of your spending, decide what is most important to you. Prepare yourself to make difficult decisions to determine what is genuinely required and what is a luxury. Do look closely at your lifestyle and decide what doesn’t really contribute to a good life but intrudes stealthily into your wallet.
  • Keep Track – Keep an eye on your spending, especially when using credit cards, and beware of little expenditures that easily pile up. To keep track of your budget, utilize an excel spreadsheet or pen and paper or some good spending app to keep track.

You can safely avoid overpaying and gradually increase your savings with a clear big-picture overview of your monthly budget—all with keeping track of each and every purchase.

You can have more money by actually spending it, but wisely.

(Contributed by Aman Goyal, Associate Financial Planner, Team Prithvi, Hum Fauji Initiatives)

Should I Book Profits in Mutual Funds at These Market Highs?

Share markets recently touched new heights and once again there are numerous calls that we are handling on a daily basis on the theme of ‘should I redeem my investments’, now that the markets are at such highs. Most such discussions have their starting points either in the ‘greed-and-fear cycle’ or in ominous whatsapp messages doing rounds.

Please remember, your decision to enter or exit the market should not be based on market movement or levels. If the economy is projected to do well, markets will go up. And any stock market which goes up will also have its moments of downward pressures and will temporarily trend down.

The decision to enter or exit the markets should be based on your financial plan and future financial goals. For instance, if any of your goals is nearing, you may consider transferring your investments from equity mutual funds to the debt funds and then take it out when required. Similarly, if you have invested in stocks and target price is achieved and you know the intrinsic value or say, the PE ratio is above the real value, you may consider liquidating your investments.

Otherwise, from the long-term perspective, stick to your asset allocation and if you find there are changes in asset allocation while reviewing it, you may need to switch profit from equity investments to the debt instruments, in order to bring it back in line.

(Contributed by Associate Financial Planner, Team HumFauji Initiatives)

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