Is lockdown a perfect opportunity to discuss family finances?
With the coronavirus lockout in place, you have more time to spend with your spouse or friend. Why do you use it? Cook together, clean, play, or indulge your hobbies? Concern about potential revenue uncertainties?
One way to rest the worries is to learn the facts and be trained in the best way. Try conducting a family financial audit — an significant job that is frequently overlooked. Don’t get stuck by the heavy-sounding term. It literally means holding your spouse’s vital money conversations.
If it hasn’t happened before for some reason, lockdown is a great opportunity to get started with the most important financial health mission.
So how should you do it? Any tips to make things simple for you.
Land on the same Finance list
When you and your spouse receive money, you can prefer to manage your finances separately. While you both want your family’s financial protection, your approach will be different.
Create a funding strategy
Once you’re both on the same page, the next step is to create a family financial plan. This strategy will include the following action items:
- List your short-term , long-term financial goals.
- Determine the amount of money needed to achieve each target.
- Shortlist investment avenues for creating a corpus for the listed goals.
- Assess disposable savings that each of you can invest to meet the listed financial goals.
Review the present financial condition
Now that you’ve made your financial to-do list, you must first evaluate your current financial situation. Check your disposable income, income sources, investments, expenses, expected expenses in the next few months, and bank balance.
Check for a joint bank account or not. If not, make sure you are the candidates in your savings accounts and investment accounts.
Choose the ‘Either or Survivor’ (E / S) mode in your investment, so either of you can run your accounts. Check each other on your respective finances and obligations, so you know where the other is financially. Complete transparency in financial matters helps you to know each other’s assets and liabilities.
Tax planning is important to improve disposable income and reduce tax liability. So, consider their tax consequences when planning new projects or evaluating old ones. Collect and manage tax-related information, Form 16, Form 26AS. If you file your own taxes, start calculations.
Wait for the eleventh hour. When you’ve done your taxes, keep your pay slips and related forms ready so you can send them to your tax professional as soon as possible.
Making a budget
While these tasks have a long-term perspective, you also need a short-term outlook. You need to make a budget short-term and stick to it.
While in a conversation with your spouse, you may not be able to solve your problems, it’s a significant start. The sense of unity can give you difficult times, and enjoying the good ones is a bonus.