Money Management

Mummy, Paisa Kharcha Ho Gaya!!!

When we look back over the last 5 years how much did we spend and when we look forward how much we will spend, there are 5 areas of expenses which we need to look into :-

  • Inflation
  • Responsibility
  • Lifestyle
  • Health
  • Tax

Inflation :

A. Price of products (like vegetables, clothes etc) and Service Charge (for CA’s, Lawyers etc) are increasing day by day, example earlier Price of rice was 20/Kg now it is 40/Kg, it’s almost double.

B. Few more examples of drastic rise are price of Petrol and Diesel, Interest Rate of Loan, Housing Expenses like Rent, electricity and servant charges.

Responsibility :

One of the most important area of our life is, our responsibilities.

A. Basic & Biggest responsibility and need of family is Roti-Kapda-Makaan.

B. Further In today’s era Education system has become expensive.

  1. Fees of Schools are outrageous we all know.
  2. Only School are not sufficient these days tuitions are also required.
  3. Further there is culture to learn many extra curricular activities like Singing, Dancing, Painting etc.
  4. Fees of Colleges increase almost 8 times faster than wages.

Lifestyle :

Life Style plays a big role. We want best comforts and luxuries.

A. Cost of Living is increasing and we need Standard of Living as well.

B. Vacation, Trips is a must and ends up multiplying expenses.

C. Cost of travelling affects our budget regardless of whether we have our own vehicle or use public transport.

D. Marriage and parties are always in trend, thus we end up spending lots in preparations, attire and gifts.

E. We all need some sort of entertainment in our life, it further affects our pocket.

F. Due to Credit EMI options we spend money unnecessarily and create liabilities to maintain our lifestyle.

G. Generally People spend money because others are. People feel psychologically pressurized to spend on things that are often launched new in market every 3 months like gadgets, cars, home appliances, and they people just buy new gadgets because of peer pressure. Also when we can manage in same flat but struggle to buy new a house.

Health care :

A lot of people avoid their health priorities in day to day life and end up with huge medical expenses. Health maintenance and Medical expenses have hiked. Also large employer health plans have increased 2 times faster than workers’ wages over the last 10 years.

Few of the key area of Health related expenses are

A. Increased life expectancy and the fact that chronic diseases such as diabetes and heart disease have become more common.

B. Secondly, there has been a lot of improvement and development in the field of medical care. Major prescription drugs along with other medical technology have been through advancement and have resulted in increased health care expenses.

C. Thirdly, People who are from the older generation will have higher premiums to pay to avail health care insurance covers and for younger people; this would be a bit lower.

This goes on to increase the expenses for medical care by almost twenty to thirty percent for the same specific ailment for an older person.

D. Regular Check up – these days regular check up is required as increasing cases of Blood pressure, Eye Check up etc.

E. One has to Spend on Gym , Yoga , Proper Diet to keep oneself Healthy. These add to expenses.

Taxes :

To raise additional financial resources, government is depending more and more on indirect taxes.

Irrespective your income is good or bad you are lead to pay taxes. If you are not paying Direct Tax, you are paying Indirect Tax. Whatever we are purchasing is inclusive of indirect.

Let’s understand with example, we are earning 1 lacs per month and if we fall in 30% tax bracket then after deduction we will get only ₹70,000. But if we want to spend whole ₹70,000 we cannot. because we have to pay 18% GST of around ₹10,000. Technically we have paid ₹40,000 taxes to government apart from this travelling, hotels, education fees, home appliances, professional services, so on each and every step we have to pay tax. Tax is also one of the biggest challenge for us.

Most of the people believe that major reason of expenses is responsibilities, But here you seen that major reason of expenses is Lifestyle.

I think you are now clear with the point that there are various types of expenses which occur in our day to day and are unavoidable and there is 100% surety that it will increase with time.

I would like to conclude that one must keep saving with proper planning and with Proper Budget. Further I would like to say only saving is not sufficient it must be invested in proper place with taking help of proper expert so that we can meet all our expenses. Good Investment can help you out to take good returns and thus will lead to a Happy life.

Write a comment