Money Matters: how people plan their financial life

You work for your money, but does your money work for you? As the financial year comes to a close, we ask the question, how well do you know your money?

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What comes to mind when you think of the word ‘money’? Issues like ‘salary’, ‘bills’ and ‘expenses’ are possibly the most common, right? Perhaps ‘security’ too, since so many of us associate it with a constant income. Ideas that probably don’t come to mind as often (as they should) are terms like ‘spending habits’, ‘emergency fund’, ‘retirement plans’ – you get the idea.
Whatever the reason, the general consensus is that we are simply not as financially literate as we should be. That’s not to say that we are completely ignorant about financial matters, but do we truly understand how we can manage our money better? And if not, how can we change that?
The obvious answer and the first step is to start talking about it. Talk about what you are doing with your money, where you keep your savings (do you have any?); do you keep track of how much you spend or save; talk about your debt options to reduce it and talk about your superannuation options to grow it; talk about what your financial goals are over the short term, medium term and long term.
Don’t neglect retirement goals. What sort of lifestyle do you want in retirement – are you going to relax at home or travel around the world?  How financially secure do you envision your (and your family’s) life to be if something were to happen to the income earners in the house?
If you haven’t thought about these questions, now is the time. Indian Link speaks to some people in different phases of life on how they plan their financial life.
Mohan Singh (IT professional), Anubhuti (Business Analyst) and Atharv

How do you plan your cash flow (income and expenses)?  Do you use a budget planner?
We use Excel sheets to plan our upcoming expenses and priortise them as per the need of our family. 
How do you resolve conflict when it comes to money?
For us, what works is that both of us have the power of veto to negate any expense. So any expense we make is a mutual decision. This especially helps when we have to cut down on extra expenses. It also puts us in prospective of our priorities.
Do you make financial decisions together as a couple? If not, who does?  Did you both decide this is the best option for you?
We take all our financial decisions jointly and so far it is working well for us.
Do you have separate bank accounts or joint? Why or why not?
We have separate bank accounts since each one of us handles different payments. But both our accounts are offset accounts and we have passwords to each other’s accounts.
Have you thought about wills?
We recently met with a Financial Planner and are in the process of putting a will in place.
What is your Plan B in case you can’t work?  Do you have an emergency fund, or insurance policies to help out?
We do have an emergency fund which we won’t touch under any circumstances for day-to-day expenses or even out-of-the-blue ones. Also, Mohan has income protection to keep us afloat in case things go south (touch wood)!
If you could cut back on one frivolous expense, what would that be?
Shopping for homewares. Both of us love decorating our home and we keep buying stuff wherever we go!
How different is your lifestyle here as compared to when you were in India? Are you financially better off or worse?
We are at a different stage in life now than when we were in India. We did not have a child then so it was definitely different. Financially, we feel that we are the same as we were back in India.
Are your financial decisions based on what your family taught you, what your friends are doing, or your own research?
We continue to learn. Our base was definitely built by our families but we continue to evolve by doing our own research and with conversation with friends.
Do you financially support family in India?
No we do not have to support our families back home.
Do you set money aside for your son’s education?  Are you aware there are tax effective ways to provide for their education?
We haven’t set money aside for our son’s education but we have made investments for the same reason as financial investments give better returns than tax savings.
Will you teach your children about working with money?
He is only 3 so we haven’t really gotten there yet. Only recently we have started introducing him to the concept of money.
From 2 July onwards there is a new Childcare Subsidy that is means tested. Do you understand this fully and how it may impact you?
Yes, we aware about the new changes being introduced. For us it means that percentage benefit along with hours covered goes down, but the annual limit increases.
READ: How Chinmay Sohoni and Neha, NEW MIGRANTS manage money
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READ: How Ash Isaacs and Manisha, a YOUNG FAMILY, manages their finances
READ: How Sumit Sharma, a SINGLE MAN manages his finances
READ: How Dr Tilak Kalra and Bindu, a RETIRED COUPLE, manage their money

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