Accounting
6 Approaches To Simplifying Your Finances Using Tech
Technology’s role in our lives is constantly expanding. It shifted from being a source of entertainment, a means for communicating, to being an integral part of our everyday lives. Its applications have become so ubiquitous that we now use it for practically everything and look at it as means to make our lives easier and more convenient.
As we all know, we all have a hectic life with many activities and responsibilities, and finding the time and energy to keep track of our finances can be a bit overwhelming. Luckily, technology has also made great strides in this area.
In this article, we’ll explore six approaches you can take in simplifying your finances using tech and the advantages of this in managing your money.
Let’s get started!
6 Approaches to Simplifying Finances Using Tech
1. Use a budgeting app
Budgeting is one of the most critical aspects of financial management, but it’s also the most challenging and time-consuming, hence, often neglected. However, to get your finances in order, you need a well-planned budget that you can easily track and stick to.
A budgeting app can eliminate the taxing part of budgeting. All you need to do is to enter your income and expenses, and the app will do the calculations for you. It will give you a clear picture of your spending and categorize your expenses to decide where you should cut back to save money.
2. Automate bills payments and purchases
Another way you can use tech to simplify your finances is by automating bill payments for recurring monthly bills like rent, mortgage, utilities, and credit card bills to ensure on-time payments and avoid late fees.
In addition, you can also use apps to make regular purchases like groceries and gas to help you stick to your budget and avoid overspending and impulse buying.
3. Employ automatic savings plans
Saving money can be difficult, especially if you have a tight budget. But it’s essential to have an emergency fund for unexpected expenses or a rainy day.
One way to make saving easier is to set up an automatic savings plan where a fixed amount of money is automatically transferred every month from your checking account to your savings account. This way, you can make saving a habit and slowly build up your emergency fund without thinking about it.
4. Store important documents in the cloud
Keeping track of physical copies of financial-related documents, such as insurance policies, property titles, tax returns, bank statements, and even wills, can be a hassle.
So, instead of storing them in a file cabinet or drawer, keep them in cloud storage like Google Drive, Dropbox, and iCloud where they are securely backed up and easy to access from anywhere.
5. Use Investment portfolio management tools
Investing can be a great way to grow your wealth, but it can also be confusing and intimidating. Using a tool to track your investment portfolio can help minimize risks, diversify assets, and monitor your performance.
There are many portfolio tracking tools that you can choose from, such as eToro, Acorns, and Robinhood. These platforms can help you research investment options, track progress, and make portfolio changes needed to grow your assets.
6. Use debt payoff calculators and tracking tools
Debt can be a major weight on your finances, so it’s crucial to develop a plan for paying it off. Many great tools are available to help you handle your debt and pay it off quickly. One is a debt payoff calculator.
This tool will help you see how long it will take to pay off your debt and how much interest you’ll pay if you make minimum payments. Further, it presents different strategies and options for paying off debt in the shortest time with the lowest interest rate.
Advantages of Using Technology in Managing Finances
You already know the different approaches to simplifying your finances using tech. Now, to get you on board with this idea, here are the advantages of using technology in managing your finances.
- You can have a real-time update of your finances.
You don’t need to wait for days or weeks to get a report of your bank transactions because you can access your account on your tabs or phone with just a few clicks to monitor your spending and balances.
- You can monitor your cash flow more efficiently.
With your finances organized in an app, you can track your income and expenses more effectively to make informed decisions about where to allocate your money.
- You can make sound financial decisions with the help of technology.
Finance apps can generate reports based on your spending habits and recommend budgeting tips and bits of advice to improve your saving plan, spending habit, or credit score.
- You can track your progress in achieving your financial goals.
With the help of technology, you can set a target amount for your financial goal, such as your retirement fund, and automatically save money and track your progress.
- You can have access to a wide range of financial products and services.
You can compare bank accounts, credit cards, loans, and investment products available in the market and choose the best option that suits your needs and lifestyle.
- You can save time and effort.
Technology can automate your finances, so you don’t have to waste time on manual tasks like budgeting and tracking your spending.
To conclude
No matter what your financial situation is, tracking your progress can help you make headway toward your goals. The key is to be consistent and use technology to your advantage.
Remember, managing your finances can be daunting, but with a little organization and the help of technology, you can simplify this process and take control of your hard-earned money. Try out some of the approaches mentioned in this article and see how they work for you.
Do you wish to multiply your income? Classy as it may sound, money is not something that can be earned only with hard work. As the saying goes, “Let money work for you rather than work those hated extra hours, to add a little more to your pocket.” I believe these lines to be absolutely true, when it comes to making right investment choices, tailored specifically to meet your financial goals. In finance, right investment choices are termed as an evenly balanced portfolio. Now you may ask: What’s a portfolio? In easy terms, it is a collection of all your money/ savings, divided into proportions of the amount you invest in each type of financial products- stocks, bonds, mutual funds, insurance policies, etc.
It’s basically a risk minimizing structure, designed to overcome misfortunes or economic failure. Let this line explain you better: Never keep all your eggs in one basket. Because if the basket tumbles, you are at a huge risk of breaking them all. Likewise, putting all your money in one type of financial product, could make you lose it all. Also, as I stated in my previous article, every investment option carries certain level of risk with it and you should always consider it, while taking your decision. Having said that, I know, how eagerly you must be rolling down your eyes, searching for those strategies, that will answer the question I quoted above! Well search no further.
Here are top 5 strategies/financial products you should park your money in and “enjoy the beauty of compounded returns” (Disclaimer: These strategies are long term in nature and only give a general view of some of the best financial products- with taxation benefits*)
Mutual Funds: Investing your money in a mutual fund, could turn out to be the best source of generating long term profits. With a risk factor varying from high to medium, the right way to participate in this type of investment class is through a SIP (Systematic investment plan), under which you are required to invest a standard minimum amount of Rs 500 (on a monthly basis). There’s no upper bar as to the amount you can invest and it solely depends on your capacity. Mutual funds, especially the ones focused on equity are known to even generate a compounded return of nearly 20% in a 5 years time.
Here are top 5 strategies/financial products you should park your money in and “enjoy the beauty of compounded returns” (Disclaimer: These strategies are long term in nature and only give a general view of some of the best financial products- with taxation benefits*)
1. Mutual Funds: Investing your money in a mutual fund, could turn out to be the best source of generating long term profits. With a risk factor varying from high to medium, the right way to participate in this type of investment class is through a SIP (Systematic investment plan), under which you are required to invest a standard minimum amount of Rs 500 (on a monthly basis). There’s no upper bar as to the amount you can invest and it solely depends on your capacity. Mutual funds, especially the ones focused on equity are known to even generate a compounded return of nearly 20% in a 5 years time.
2. In general, there are various types of mutual funds, which are managed by experienced fund managers, meaning your only job is to invest and the asset management company’s job is to manage it and reap good returns for you. Most important things to look out in a mutual fund scheme is the rate of return it is offering, the experience/ credibility of the manager who’s in charge of your funds and the net asset value of the chosen scheme. From taxation view point: Equity-linked Saving schemes (ELSS) are considered to be the most effective tax-saving instrument under section 80C, allowing you to save long term capital gains/ earnings (i.e,exceeding 12 months) uptoRs 1 lakh
3. National Pension Scheme: NPS is one of themost trustworthy and best low-risk investment scheme backed by the Pension Fund Regulatory and Development Authority (PFRDA). With no minimum limit for making an investment, this investment class offers a diversified portfolio in equity, fixed deposits, corporate bonds, liquid funds, etc. This investment option is a good way to secure your retirement life, especially when you aren’t that good at personally allocating assets for your future needs. Under NPS, there are different classes of investments, and just to make you aware of the returns it offers you, I am quoting the current on-going compounded returns of Class E funds: 1 year return: 9.5%, 3 year return:8.5% and 5 year return:11%. From taxation view point, NPS qualifies under section 80C, 80CCC, and 80CCD, where you can save whooping Rs 1.5 lakh every year. Tax deduction doesn’t end there. Under Section 80CCD(1B) an additional amount of Rs 50,000 can be saved. Furthermore, under section 80CCD(2) if your income is in the high tax bracket, you can ask your employer to contribute 10% of your salary, without you having to do any effort for the investment sake. Sounds fair enough?
a. Public Provident Fund: Considered one of the best risk averse mean of multiplying your income, a PPF account can be opened via approaching a bank or even at a local post office. Backed by the government of India, it serves as a long term savings fund with an impressive rate of return, currently at 8%, which compounds annually. Annual deposit limit for investment is Rs 500 at minimum and Rs 1,50,000 at maximum. Generally the tenure of this scheme is 15 years, which can be further extended to 5 years.
b. However an early withdrawal after the 7th year of opening an account can also be made. You are even entitled to avail a loan of 25% from the balance of your PPF. But I don’t recommend it, as the interest rates charged on it is generally 2% higher than the prevailing rate of a normal loan. However, the best thing about this fund is the unmatched tax benefit. The compounded interest rate that you earn on this fund is absolutely tax free, which means the amount you will normally collect after 15 years, will go straight into your pocket.
However an early withdrawal after the 7th year of opening an account can also be made. You are even entitled to avail a loan of 25% from the balance of your PPF. But I don’t recommend it, as the interest rates charged on it is generally 2% higher than the prevailing rate of a normal loan. However, the best thing about this fund is the unmatched tax benefit. The compounded interest rate that you earn on this fund is absolutely tax free, which means the amount you will normally collect after 15 years, will go straight into pocket your pocket.
4. Gold/ Gold ETF: Gold is one of the oldest investment class, that has existed for centuries, even before the financial system was established. In India, the love for Gold is no secret. A little heavy on the pocket, owning gold is a necessity, if you wish to reduce the risk factor from your portfolio. Unlike other financial products, the value of gold is far less volatile (fluctuating in nature) and the rule of time value of money isn’t applicable over it, meaning when the inflation rate is on the rise, gold has shown a track record of appreciating in value, unlike fiat money which shows a trend of depreciation in value. This positive trait of gold, can be used as a hedge, whenever the economic condition of the country dingles over a long period of time. Talking about the ownership, people often find it uncomfortable to store gold bars and coins at their homes, in fear of theft and therefore use bank vault facility, adding further cost. To breakthrough this, financial technology has come up with a modern way to own gold- Gold ETF (Exchange Traded Funds). Gold ETF is a commodity stock, which trades on the stock market like any other normal stock, with the only difference that it represents the real time value of gold as an underlying asset, meaning you are the owner of your gold, but only in papers. This type of asset has two benefits:
a) It allows you to own gold without the hassle of possessing it in physical form.
b) It is far more a liquid asset than real gold, meaning it can be easily bought and sold on the stock exchange anytime, generating cash-flows for you instantly. The investment cost is comparatively a little less in Gold ETF, as compared to that in buying physical gold. The current price of 10 grams of gold is around Rs. 34,110 with a daily price variation of around Rs. 100.
5. Cryptocurrencies: A completely new asset class, still under constant technological development, cryptocurrencies are the future of the finance industry. Thanks to the blockchain powered technology,enabling peer to peer transactions, meaning you will soon be able to transfer funds from your personally owned account to another, without the need of any intermediary (bank). This will give you complete ownership over your funds and its movement. But hey, this article is not dedicated to crypto, so lets limit our approach to the investment part only.
In the year 2011, the cost of 1 unit of Bitcoin (the first cryptocurrency to ever release) was around $0.31 meaning if you purchased around 100 units of it, that would have amounted to a mere investment of $31 equivalent to Rs 2,137.58 only. The next thing I am about to tell, might make you stand on your toes. On December 11, 2017, the value of one unit of Bitcoin shot as high as $ 17,549.67, meaning if you held your investment for only 7 years, you would be sitting on a net worth of $17,54,967 ($1.7 million) without spending any extra penny. Yes you read that right, you would have been a millionaire! However, the value depreciated again falling to $ 3,895.63 (current market value). Highly volatile in nature, this asset class is only for those having a high risk appetite and good funding. However in India, the use of digital money is still illegal, but that doesn’t mean we should be sitting ducks and not look beyond the potential crypto has to offer in the near future. Today, there are many types of cryptocurrencies, with new ones launching every year including the JPM coin, released this year, by the international banking giant JP Morgan Chase. Currently, the most well knowncryptos are Litecoin, Ripple, Ethereum, Ethereum Classic and Bitcoin Cash other than Bitcoin itself.
Blog by : Aman Sharma
Email : 1995amansharma@gmail.com
Contact : +91 91493 71029
A. When and How much TDS should we deduct???
ANSWER:
TDS deduction on transfer of certain immovable property other than agricultural land.
Any buyer, responsible for paying, to a resident seller, any sum by way of consideration for transfer/sale of any immovable property (other than agricultural land), shall, at the time of credit of such sum to the account of the transferor (Seller) or at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to one per cent of such sum as TDS thereon, where the consideration for the transfer of an immovable property is more than fifty lakh rupees.
B. When and How much TDS should we deduct???
ANSWER:
STEPS TO BE FOLLOW FOR DEDUCTION OF TDS
Visit to TIN NSDL website ( www.tin-nsdl.com ), the following window will be display:
Click on Service tab and search for “TDS on Sale of Property”, the following window will be display:
Click on “TDS on Sale of Property”, the following window will be open:
Under ‘TDS on sale of property’, click on “Online form for furnishing TDS on property (Form 26QB)”, the following window will be display:
Select the Form 26QC “Payment of TDS on Rent of Property” form as given will be open:
Fill the complete form as applicable, the main part of the information will be asked as given below:
- PAN of the seller & buyer
- Communication details of seller & buyer (Address, Phone No., Email ID etc.)
- Property details (Property type, address, consideration, date of credit/payment etc.)
- Amount paid/credited & tax deposit details
Submit the duly filled form to proceed. A confirmation screen appears. After confirming, a screen appears showing two buttons as “Print Form 26QB” and “Submit to the bank”. A unique acknowledgement number is also displayed on the screen. It is advisable to save this acknowledgment number for future use.
Click on “Print Form 26QB” to print the form. Then click on “Submit to the bank” to make the required payment online through internet banking. Then proceed to the payment page through internet banking facility of various banks. For list of authorized banks are as under:
On successful payment a challan counterfoil will be displayed containing CIN, payment details and bank name through which e-payment has been made. This counterfoil is proof of payment being made.
Steps to Download TDS Certificate Form 16B:
- Register & login on TRACES portal ( www.tdscpc.gov.in) as taxpayer using your PAN (At least After 5 days of making TDS Payment):
- Select “Form 16B (For Buyer)” under “Downloads” menu.
- Enter the details pertaining to the property transaction for which Form 16B is to be requested. Enter the Assessment Year, Acknowledgment Number, PAN of Seller and click on “Proceed”.
- A confirmation screen will appear. Click on “Submit Request” to proceed.
- A success message on submission of download request will appear. Please note the request number to search for the download request.
- Click on “Requested Downloads” to download the requested files.
- Search for the request with request number. Select the request row and click on “HTTP download” button.
For further clarification write Email on pjainpca@gmail.com
9250662051
(CA. Pardeep Jain)
