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Executive Summary – Ignorance of personal finance matters can have far-reaching negative consequences in one’s life. Ignorance of investment planning, taxation and forgetting to pay insurance premiums, monthly dues and credit card bills can affect our finances. We will have to pay penalty, face disrepute and make the effort of renewal.
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Credit Card Payment Dues – We use our credit card for shopping endlessly and forget to pay the credit card dues. Forgetting to pay credit card dues is a costly mistake. The interest charges are high and you might have to forego interest free cycle. This can hurt your credit profile.
Tax Calculation and Management – Many of us are not interested to understand taxation rules and end up evading tax or paying more than we should. We should understand investment options that will help save tax, invest in the ones that are suitable for us and pay only the requisite tax amount. It is also important to know how to file taxes, the procedure and rules regarding refund, interest on tax etc.
One should take responsibility for one’s financial life and take steps to remove financial ignorance so that one does not end up making costly mistakes that can affect personal financial planning and its goals.
Investments and Financial Planning – When a person is young, he/she cannot ignore financial planning and investments management on the pretext of a busy social life or work life. The magic of compounding only works better with more time. Some people ignore it as they find it boring or overwhelming. But ignoring personal finance management now can affect long-term financial goals and retirement plans. If one is not interested in planning finances, he/she should enlist the help of a professional. But one should be interested in the planning advice, strategy and short-term and long-term goals being set and be an integral part of the planning procedure.
Tax Calculation and Management – Many of us are not interested to understand taxation rules and end up evading tax or paying more than we should. We should understand investment options that will help save tax, invest in the ones that are suitable for us and pay only the requisite tax amount. It is also important to know how to file taxes, the procedure and rules regarding refund, interest on tax etc.
Insurance Premium – Sometimes, people forget the due date for payment of premium on insurance policies. This results in the lapse of the policy which is a waste of your money. Moreover you will not have the financial cushion when you really need it because you have forgotten your premium payment. When you revive the policy, you have to pay revival charges which is an unnecessary strain on your pocket.
Utility Bills – It happens with many of us that we forget to pay electricity bills or the society maintenance charges. This will result in discomfort and additional charges as penalty. If we are aware of the due dates and take action accordingly, we can avoid all the pain. One way to ensure that you do not miss paying bills is using automation to pay bills. You can use the Auto-debit facility in your Internet banking account to make payments without you having to remember them explicitly.
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