Analysing the past transactions and looking towards near and new future

In India, number of middle class families is more than the rich class. Generally, it’s observed that all the middle class people pay their taxes on the time with help of the financial experts regularly but they hardly contact him/her again throughout the year while dealing with the financial crisis or management of the income. This blog is purposefully written for all my middle class readers who are currently facing many problems in the day to day life. I am sure you will start behaving like a financial expert to a certain extent after reading this blog.

In the last blog we have already seen the importance of the financial survival for the next 6 months. On the other hand, it’s pretty clear that middle class person cannot increase his/her income immediately but after analysing the past transactions, he/she can curtail the unnecessary expenses and start planning to generate the new income source. Many great economist have already forecasted that India will recover in “V” shape but till achieving the recovery side i.e. a growth side of “ / “ , financial survival will play key role.

Before writing about the analysis of past transactions, I assume that you have already downloaded the financial details of Mr Abhay on your laptop or mobile. (If the details are not available you can go to the previous blog and can download excel file)

Segregation of expenses

Segregation of expenses into Recurring expenses and non-recurring expenses

It can be concluded that for the next 6 months non-recurring unnecessary expenses should be fully avoided and that saved money can be useful for unseen contingent liabilities. It is observed that Mr Abhay is spending more than 50% of his income on recurring expenses. Therefore, it’s very vital to analyse the recurring expenses by segregating the same into three categories that is avoidable expenses, necessary expenses, contingent liabilities and required provision

It is a seen that Mr Abhay should avoid the unnecessary expenses and keep as much as liquid cash for contingent liability and expected inflation.

Now let's deal with the saving side. Savings may consist of insurance, mutual fund and money kept at banks.

Cash deposited in banks:  Such kind of saving is considered as highly liquid assets. In such cases, if the amount expected at the time of maturity is greater than the amount deposited then one can continue with recurring or fixed deposits.

Insurance: insurance can be classified into two types (considering only in case of individual)

1: Mediclaim: In current scenario one must pay the premium of such kind of insurance to have cover for illness.

2: Pension or plain money term: In short term if you are running out of money one can pause paying the premium for the next three to four months after consulting with the insurance agent. Closure of any policy may result into the loss of money in the long term.

Mutual Fund / Shares:

Everyone is observing the declining trend in the share market. If you are having excess cash and ready to wait for more than year for bagging the profits then this is good time to invest money in the share market and mutual fund as they are available at the lowest.

If one is getting the limited income, it’s advisable to pause the SIP for the next few months till the income gets restored to the regular level.

Looking at the near future

It is said that wise people forecast but foolish predict the future. Let’s try to forecast our upcoming payments and changes we may have to face in the job or business. This is good time to prepare ourselves for upcoming future.

Tax liability

In India, financial year starts on 1 April and ends on the 31^st March of the next year. Therefore, every citizen is responsible to pay income tax at full rate on income received till March 2020 (due date is already extended). If you are the owner of any property you are liable to make payment of property tax to the local authority.

Education fees and electronic gadgets

It’s expected that most of the school will start conducting their lectures through the online portal. Parents have already started working from home. It is necessary to take a review of available all electronic gadgets and internet subscriptions so all family members can continue their respective activities.

Travelling expenses, internet charges

Due to work from home, everyone has started saving in travelling cost on the other hand the spending on internet vouchers is increasing. Most of the restaurants are closed; many people have rediscovered “cooking”. This has resulted into the increase in the grocery bills, but saving in outing expenditure.

Changing job or getting the less salary

Most of the people around the world are facing the above mentioned scenario which may result into the stress which is quite natural also. Readers are requested to share the current situation with the family members and also consider their opinions. Being a professor I can definitely say that, you will get most innovative and practical suggestion from your children, your spouse and your parents. Remember that one can become truly financial independent at a faster rate when he has or she has wholehearted support from his or her family. One should start learning the new skills or upgrading skills with the help of online schools. Many national or international institutions are providing courses at a very reasonable rate.

Be independent and up to date for walking in the future

You should feel proud that for the last 2 months you are managing the home and office very efficiently (without help from maids). Generally, when you are having latest cell phone model or laptop you are considered as a techno savvy person in India. Let’s take a step toward the usage of AI in day to day life. In the new world many devices are available which are utilising the artificial intelligence to make our day to day life easier. Please read and take the information about Ubtech Lynx, Asus Zenbo, Roomba by IRobot, Apia AI Robot Companion or Alfawise Magnetic.

Jobs and businesses of the future world

One can easily get the glimpses of the upcoming trends in the jobs as well as business by getting the information about IBM Watson, Google brain, SAP digital boardroom along with the above products. If you are a businessman do watch documentaries on industrial Revolution 4.0 and the changes expected when we will enter into the industrial revolution 5.0. If you are a teacher this study will help you to shape the next generation for the new world.

In this blog we have seen the analysis with the help of financial figures along with the changes required to fit into the new world by considering qualitative inputs as well. It is said that one should not become a philosopher unless and until he or she starts earning a good standard of living. So start working hard for the bright future on the ethical and good path which will ensure the betterment of the society as well.

(If you are good at “Marathi” the regional language of Maharashtra, India, you can read the “Marathi” version of this Blog by clicking the link

https://managingrupaya.blogspot.com/2020/05/transactions-analysis-near-future.html  )