Money Mistakes

How many of mistakes people commit in their life time? And what about money mistakes, Well there are a few even i regret, No i guess i should be more open about it there are a lot of Money mistakes that i regret. But i am learning from my experience now and hope to be even better as i learn along the way. I am listing down some of the common mistakes as below that even i have committed and i really believe everyone should avoid making them as much as possible.

1. Living beyond your means : There is a simple logic we can apply here, if your expenditure is more then your income then in all probability you will be in debt even before you know it. So avoid this at all times. I have done this mistake several times, like just buying a gift for someone close i get carried away and buy something beyond my means and end up in debt.

2. No Budgeting : I guess most of us just forget to Budget, if you don't know where your money is coming from or going to how will you control it. So Budget, it maybe just a simple excel file to do but it needs to be done. You need to know how your money is moving and then only can you plug unnecessary holes, you will have better control over money.

3. To Much Loan : I made a mistake once of taking a personal loan, and then one mistake that i just keep on doing is spending on a credit card. Its a pain now. You certainly cannot avoid taking a loan for the house but then i believe you should only take as much as you think you will be comfortable in repaying. Same goes for any other loan, you don't need to buy a costly car just because it comes with an easy finance option and you can use it to show off.Just be careful while taking a loan.

4. Not Saving Enough : Saving should be treated as any other expense that you incur during the month, if you are making a budget and writing in the expenses column your electricity expenses, your phone bills then also add a column for savings, it should be treated as any other expense and should be paid for every month. Start small and slowly try to increase.

5. Ignoring Disability Insurance : I am not the sole bread winner of my house but i am certainly the primary bread winner and if i were to get disabled due to any reason and which could effect my earning potential, so i got myself a disability insurance, i know it is not enough but i did get something so don't ignore it.

6. Don't Diversify : Have you diversified your portfolio, Diversification can actually spread your risk and help in minimizing it as well,, it can also optimize your returns. You can diversify by investing part of your money in equity through direct purchase, part of it into mutual funds, buy Gold, Buy Real estate and also Debt funds. You could even further diversify your portfolio by investing in different sector funds etc. But Diversification helps since no one can predict accurately how a certain sector of investment is going to perform over long periods.

7. Not taking professional Advice : No Matter how much you have read about financial planning and tax savings etc but you will be surprised by the nitty gritty that a professional can help you with. And its always helpful to take a professional advice whenever you really need it.

8. Not Having goals : Goals give you focus, they give you a benchmark, they help tell you that there is something you have set to achieve and have not done it yet. So go ahead and make goals for yourself. Otherwise you will never know the purpose your investments serve.

How to Select a Tax saving Fund?

Tax Saving Funds seem to be the flavor of the day now, with more and more funds coming up on a daily basis it becomes very difficult to select the most appropriate fund. How do you select a good tax saving fund. What are tax saving funds. They are basically Mutual funds through which you can save tax as well as save money(is it sounding right). Anyways its a good investment opportunity. I was looking around and one very premium site for personal finance puts it in five easy steps.

1. Before investing in such a tax saving fund ensure that it belongs to a fund house that has a well defined investment process.

2. Go for funds that have a broad investment mandate that permit them to invest across the market with any investment style(growth, value)

3. The tax saving fund must be well diversified across stocks and sectors

4. Keep in mind the NAV returns visavis the benchmark indexes over a long period of time.

5. A good tax saving fund would be one which has given a higher NAV return at lower volatility.

Downtrend in the Markets

With Markets going in for a free fall, it seems they are going to go so low that it might become very difficult for them to recover and for people like myself who have a significant part of there portfolio when the markets were climbing are already feeling the losses, What could you probably do and what not to do is now left all to speculation. I have decided to stick to my present portfolio and maybe do a little bit averaging by increasing my position in some of the stocks. This i might(MIGHT) be able to send some when the market's are in an uptrend and maybe be able to recover some of my losses.

I had some extra money this month and have been thinking of investing the same somewhere but have just been not able to decide yet and don't know if i will be keep that money in my account fo long now since i have to buy some gifts (like gold) for some upcoming occasion which is probably in the later part of the year but am thinking of buying it right now in order to avoid the high prices of gold at a later date. But then this too is a speculation and i really dont know what to do yet. So lets see.

Income tax forms

For all those who are looking for income tax forms for India, for filing returns i am giving a link to the official website of the Income tax department of India from where you can download the forms.
Remember there are separate forms for separate types of income, so be careful for filing income tax returns fill in the right form.

IT Department Website