Personal finance is one of the most avoided area of finance, which is the reason as to which it is the most important of all. People tend to neglect planning and maintaining their own finances even if they are from finance background themselves. Professionals like bankers, chartered accountants etc plan the finances of their clients, they act as an advisor to corporates working in the corporate sector to keep an edge on their finances but when it is their turn to manage their own finances, avoid it and loose this very important aspect of living. An individual requires as less as 2 to 4 hours to manage their finances in a month, giving which proves to be helpful in many ways. So here is a quick guide for people who want to start on maintaining their personal finances, read till the end to gain a proper understanding of the same-
3 Simple concepts to maintain personal finances
OPERATION OF ACCOUNT
If you open an FD in some bank, or you are opening an FD you will have to choose the type of operation you want with your FD upon being asked by the bank. There can be 2 types of operation – joint operation or EOS i.e. Either-or Survivor type. We do not wish for any mishappening of course but it is better to be prepared in case anything happens and we land up in the worst-case scenario. So the better option to chose for is the EOS operation type and not the Joint operation type because in case of a joint operation, the bank asks for the signatures of both the members and in case any of the 2 is not present, the operation cant be done. In the Either-or Survivor operation, either of the members can sign for the operation in the absence of any one member and get access to the funds. This is also one of the most important tips of the 3.
The most important point to remember in maintaining personal finances is to keep nominations for all your financial accounts. Whether it is your savings account, current account, demat account, FD, or any other bank account, do not avoid keeping nominations for all of them. Maintain a record of all your bank accounts and check if they have nominations or no. if they do not have nominations, then you should willingly add a nominee to your accounts. This is a good step which will make you proud of yourself and save you from future regrets. Doing something for yourself is important because everyone earns income which is also used for maintaining personal safety and wellness, so that makes personal finance important too to achieve whatever you aim for.
PASSWORDS OF INVESTMENT ACCOUNTS
You should have a habit of saving your passwords in a document and keep it in the reach of another person you trust. You should have a safe file which you can share with a person close to you so that in case of any mishappening of emergencies, someone should be able to access the financial accounts when needed. In case is any family member or a spouse meets with an accident, the finances should be accessible by another person too or the other spouse. The easiest way to do so it by sharing the password for internet banking with the other person. It’s a choice that you have to make in order to ensure easy accessibility.
A simple way to save and maintain passwords is by maintaining an excel sheet where in you keep adding accounts and their credentials and save it with a password. You can list up your savings account, demat account, PPF etc. and also mention their details in front of each of them. You can update or modify the details whenever you want to and save the excel sheet with a password which you can change any time. You can access the sheets with your mobiles anytime and anywhere and you can also save it in a pen drive or your PC.
So here is a summary to all the concepts you need to take care of while maintaining your personal finances-
- Firstly, the most important thing is to make an excel sheet of all your accounts and mention their credentials in it, the excel sheet can be protected with a password which you can share with a person you trust so that in case of any emergency the funds are accessible in your absence.
- Keep nominations for all your accounts
- opt for the Either or Survivor operation type when creating an FD with any bank for easy accessibility if one of the members are not available.