Separating
the wheat from the Chaff
Introduction
We do so
much to achieve what we want, little realizing the fact that we can achieve
them even by containing by what we do! We are all very familiar with the
cleaning of our homes and offices during Deepawali. Ever wondered about
cleaning your finances? It’s definitely worth giving a try. It will help clear
the clutter and having a clear view of your finances. This new year, let’s
resolve to clean our finances and lit the lamp to our financial freedom! We
have listed down some of the ways which can help you to achieve your financial
resolution this year-
You open
a number of bank accounts over a period of time. A childhood account, then a
new account at the time of college and then a few accounts on probably every
job change. Managing multiple bank accounts can be a daunting task. From
maintaining the minimum balances, and making transactions to make sure that the
accounts don’t become inoperative to maintaining a database of all account
details and maintaining and updating the login credentials. There is so much to
do. You have to pay the charges for various services for all accounts too. It’s
complex and costly. The suggestion is to bring down the number of accounts to
two, that’s all you need in this digital world.
- Efficient
Use of Credit Cards
Credit
cards have become a fashion statement these days. The humongous charges
associated with them make sure of making you feel guilty if you miss out on one
payment deadline. Not only monetary, but the stress to pay dues on time goes
unnoticed. It’s ironical as to what should be used as the last option is
actually used as the privilege! You should use the debit card or other payment
mechanisms in general and the credit card should only be used at the time of
real emergency, the name itself says ‘credit’, then why take it at leisure?
It is
suggested that you have only one card, use it only at the time of emergency,
and also set up an auto-debit facility so that you don’t miss out on the
deadline.
- One
Stop-shop Payment Wallet
Virtually
every company these days is coming up with its own payment wallets. Ever
wondered why are these companies are investing in this facility and offering
you cashback? One, it is a mechanism to capture your data, run analytics and
cross-sell. Two, they are likely to generate traffic from customers who have
wallet balances. Three, they may gain customer loyalty as you would like to
utilize your wallet balance for future purchases. This is where their plan is
likely to work, by offering another cashback to welcome you again, and this
goes on and on.
Some
companies play even smartly by giving you a discount code to be applied to your
future purchases. You purchase something out of your budget thinking that you
will apply the voucher in your next purchase for it to fall within your budget.
However, since you maintain so many wallets, remembering every voucher along
with timelines becomes a task in itself, leading you to miss out on them. Moreover,
your funds keep lying around in these wallets fetching you nothing.
It is
suggested to exit out of these complexities, use one simple one-stop-shop
payment app like to have a track of all your transactions and vouchers in one
place and simplify your life.
- Goal-oriented
Investments
You want
your money to work hard for you. You see a good opportunity for the same in the
stock markets. You open a Demat account and start investing in shares.
Over a period of time, you find that you have accumulated a bunch of stocks and
not sure as to what to do with these stocks. You had bought some of those
stocks on the basis of your intuition, others on the basis of some research
report, some news, some expert advice, and the like. A good practice is to
prepare a file and document the reason for investing along with the bought date
and price. This will help you to take the decision in clearing off the unwanted
stocks in the portfolio. There will be a two-way effect - firstly, it will free
your capital and secondly, you can make more effective use of the free capital
rather than letting it stuck in some underperforming stock.
Conclusion
Today we
have ample of options and information. We have to be very clear about our
objective before starting something, else we may end up nowhere. The ability to
clean and simplify means to eliminate the unnecessary so that the necessary may
speak. Simplicity is the essence of happiness- the ultimate
sophistication. Let’s resolve to stay happy this year, financially and
otherwise!