Don’t lax, pay your tax

Momeys.. Bet your lists are going berserk with holiday season approaching. For a lot of us, travel would be on cards. A flurry of hosting to playing guests at weddings & parties will take up time. Add to that the pressure of turning out your best – a few salon visits & shopping trips – there goes any possible free time out of the window. But no one’s complaining. After all December is a time we all love waiting for.

Now having looked at literally the brighter side 😊, this post is to remind about the money that shouldn’t fall prey to taxes. We have seen from very close quarters, fellow momeys have heavily procrastinated, only to loose money to tax.

November-December can be busy time but it shouldn’t come at the cost of tax planning. For those in mid to high tax brackets, this is a great time to take stock. Here are simple steps to approach tax planning:

1. Calculate your year’s taxable income. For eg. If you have rental or interest income in addition, add it to your salary.

2. Determine your tax bracket

3. Check if you have any deductible investments like Home loan payments, life insurance, PF contribution, PPF etc. Under 80C, you can get tax deduction upto 1.5 lacs.

4. Check for any shortfall in the deduction limit of 1.5lacs. If the tax free investments are not totalling to 1.5 lacs, you need a tax plan.

5. Revisit your financial goals. If your money requirement will be soon, you will have to look at lesser tenure options.

6. You believe in No risk – No gain? Momeys if you want utmost safety of your capital, choose safe fixed income options like PPF or FD. If minor volatility doesn’t bother you, you can take some risks with market linked options like NSC, ELSS.

7. If youYou want higher returns, then zero down on NSC or ELSS. (ELSS would be our choice)

8. Save your investment proofs in a folder. While filing taxes, you will need the proofs handy so ensure you keep them easily locatable.

9. Invest because today is the best day. The sooner you finish tax planning and have your choices ready, go ahead and make a purchase. Often delay in investing leaves you in lurch when employer’s HR asks for proofs. For lack of proof, they deduct tax from salaries. You could totally avoid such rude shocks.
In the end, all we can say that is every money cautious person is taking stock of their tax liabilities ahead of the spending season . Are you too momey?

Successful habits of a Money Managing Mom

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Money knows no short cuts. It takes an effort if not an army 😊 to accumulate the riches we so desire. Momey-hood is a tough role but no one can do better justice than us at being good money-managers. Here are our absolute best habits for Moms to excel with money.

  1. Ledger of expenses: An account of household expenses keeps the overheads under check. It also motivates to save more by keeping an eye on outflows.
  2. Due-dates: A calendar for all payment due-dates keeps you prepared for any big expenses that can knock down liquidity such as: School fee, Insurance premium, SIPs, Loan EMI, House help salaries, Credit card payment and the like
  3. Saving first rule: A good part of (minimum 30%) monthly income should be first and foremost kept for savings / investments as a rule. The balance should be used up for family’s expenses.
  4. Create separate funds: To fund your wish lists, create small pools such as travel fund, festive shopping fund. This will ensure you plan your recreational expenses and not do them on impulse. You can exhaust these funds and start all over again for your next goal.