Simple Financial set-up - is it possible ??

[hender]

Is it possible to create a simple financial setup, understanding your income and expenses, setting realistic financial goals, and making informed decisions about saving and spending, in today's world !!

How are you managing expenses - CC , DC, Bank Account, Cash etc
Saving/Investment - PPF, FD, MF, Gold, Bond, Demat, Cashback etc
(Loans/Liability. Financial Apps.)

As a family or as a single !

What's your present set of combination?

How is your setup Simple or Complex !!

 

[real_name_hidden]

I think it's possible to create a simple financial setup, I've started tracking my expenses since 2024 and was shocked to know that it was far more than what I had estimated in back of my mind. About investment, i transfer a certain amount of money to one of my bank account used solely for investment once salary hits my account.

About making informed decisions about saving and spending, my middle class upbringing should help me avoid unnecessary splurge (hopefully).

About managing my expenses, i try to use my credit card wherever possible. DC is mainly used for cash withdrawal. Some cash expenses are unavoidable.

About saving and investment, currently I'm only investing in nifty and nifty next 50 index fund, debt funds through mfcentral. However I've significant exposure to mid and small caps through mutual funds and plan to start investing in them if I find reasonable valuations.

Staying away from stocks, short term trading as I've experienced first hand how it works and time/efforts spend does not seem productive.

The thing that worked in my favour has been coa in my 1st job, WFH setup currently allowed me to save a lot on rent and travel expenses. Have lived on rent for few years also but had less than 15% outgo compared to salary at that time.

Married but managing my investment solely
To me my setup of investment seems simple enough.

 

[Virtual King]

My Personal Experiences and Perspectives
Based on my experience, some data points and insights are summarised below.

Financial and Family Background.
Salaried. Married.

Financial Set-up.
I track my expenses manually in a diary, on a daily basis and jot down all the daily expenses. These include rent, grocery, movies, dining, travel, domestic help, fuel etc. Most of these expenses are aggregated in the credit card statements, so I use the aggregates from there to plan for the next month and to tally expenses with the current month. Broadly allocate money for the next month and then stick to it. Keep some dough as reserve for unforeseen situations. I also use Excel sheet with columns as per my requirement and fill it monthly and then annually. Thus, I keep track of my weekly, monthly and annual expenses.

Managing Expenses.
Earlier believed in only debit card/cash. With corona, adapted to UPI. Then, since last year - have graduated to credit cards - up to 50-60% of my total annual expenses. Balance is a mix of cash and UPI.

Savings.
I generally save up to 50-60% of my total income easily. This has been a constant average rate over the last many years. Since I do manual budget tracking, so can focus on weeding out any extra expenditure. Plan my big-ticket expenses - which have now dwindled down to far and few. Also have a PPF account (for a 15-year long term view), a few FDs (for a mid-term view) and some cash for routine expenses.

Cash Flow.
Apart from my monthly salary, also have monthly FD returns, rental income. So adequate cash flow is maintained.

Credit Card Usage.
Use my credit cards as debit cards to maintain cash flow. The bill generation dates are on 1st/2nd of each month- so the statement cycles overlap with the months, thus keeping my tracking of rewards and expenses aligned to my monthly budgets. Have adequate limit in all crads to meet my expenses.

Investment.
Plan my investments based on the upheavals in the market and deploy as and when I spot an opportunity. Invest in direct equity - never in mutual funds. Have adequate diversification. Based on the market, have book profits as and when deemed fit - both short term as well as long term capital gains.

Insurance.
Have adequate health + life + house + vehicle insurance.

Income Tax.
I get my salary after TDS. For rental income + FD interest + capital gains, I pay my advance tax, generally towards the end of the FY (between January - March). I plan for it accordingly. Fill the ITR by mid-July after making any adjustments/refunds/additional tax. Generally, work out the advance tax manually to get a firsthand picture of my tax liabilities based on my income. And then discuss with a tax consultant for minor fees. Then fill up the ITR after confirmation and understanding the nuances. Helps me in managing and planning my finances better.

Loans.
Finished off my loans - home loan as well as car loan - some time back. So, no debt as of now.

Apps.
No apps. I prefer manual system - jotting down my cash flows and expenses on occurrence. It is an old habit from my childhood. Has served me well. Gives my time to refine my budget as well as plan ahead as I put my thoughts to paper by pen in my own hands. I am comfortable with it. I also use Excel sheets for summarising my monthly and annual expenses etc. to decipher some patterns which I may have missed.

Time Spent.
I generally spend about 10-15 minutes per week - about 1 hour per month on planning and jotting down my cash flows and expenses.

Hope this helps. 🙂

 

[Virtual King]

How is your setup

My Personal Experiences and Perspectives
Based on my experience, some data points and insights are summarised below.

Financial and Family Background.
Salaried. Married.

Financial Set-up.
I track my expenses manually in a diary, on a daily basis and jot down all the daily expenses. These include rent, grocery, movies, dining, travel, domestic help, fuel etc. Most of these expenses are aggregated in the credit card statements, so I use the aggregates from there to plan for the next month and to tally expenses with the current month. Broadly allocate money for the next month and then stick to it. Keep some dough as reserve for unforeseen situations. I also use Excel sheet with columns as per my requirement and fill it monthly and then annually. Thus, I keep track of my weekly, monthly and annual expenses.

Managing Expenses.
Earlier believed in only debit card/cash. With corona, adapted to UPI. Then, since last year - have graduated to credit cards - up to 50-60% of my total annual expenses. Balance is a mix of cash and UPI.

Savings.
I generally save up to 50-60% of my total income easily. This has been a constant average rate over the last many years. Since I do manual budget tracking, so can focus on weeding out any extra expenditure. Plan my big-ticket expenses - which have now dwindled down to far and few. Also have a PPF account (for a 15-year long term view), a few FDs (for a mid-term view) and some cash for routine expenses.

Cash Flow.
Apart from my monthly salary, also have monthly FD returns, rental income. So adequate cash flow is maintained.

Credit Card Usage.
Use my credit cards as debit cards to maintain cash flow. The bill generation dates are on 1st/2nd of each month- so the statement cycles overlap with the months, thus keeping my tracking of rewards and expenses aligned to my monthly budgets. Have adequate limit in all crads to meet my expenses.

Investment.
Plan my investments based on the upheavals in the market and deploy as and when I spot an opportunity. Invest in direct equity - never in mutual funds. Have adequate diversification. Based on the market, have book profits as and when deemed fit - both short term as well as long term capital gains.

Insurance.
Have adequate health + life + house + vehicle insurance.

Income Tax.
I get my salary after TDS. For rental income + FD interest + capital gains, I pay my advance tax, generally towards the end of the FY (between January - March). I plan for it accordingly. Fill the ITR by mid-July after making any adjustments/refunds/additional tax. Generally, work out the advance tax manually to get a firsthand picture of my tax liabilities based on my income. And then discuss with a tax consultant for minor fees. Then fill up the ITR after confirmation and understanding the nuances. Helps me in managing and planning my finances better.

Loans.
Finished off my loans - home loan as well as car loan - some time back. So, no debt as of now.

Apps.
No apps. I prefer manual system - jotting down my cash flows and expenses on occurrence. It is an old habit from my childhood. Has served me well. Gives my time to refine my budget as well as plan ahead as I put my thoughts to paper by pen in my own hands. I am comfortable with it. I also use Excel sheets for summarising my monthly and annual expenses etc. to decipher some patterns which I may have missed.

Time Spent.
I generally spend about 10-15 minutes per week - about 1 hour per month on planning and jotting down my cash flows and expenses.

Hope this helps. 🙂