Checklist for client on-boarding Bookkeeping WorkDecember 14, 2018
Bookkeeping tips for Small scale business ownersDecember 24, 2018
Individual finance or personal finance includes management techniques based on financial principles that are applicable to individual or family unit financial activities. This type of financial regulation helps to manage money, budget, savings and expenditure. It also takes into account future risks and life events that involve financial matters. Thus, certain key financial areas are needed to be explored that helps towards providing financial freedom for a lifetime!
- Personal books of accounts:
- These personal accounts books need to be maintained in order to keep a record for the ledger accounts in the financial accounting system.
- It basically consists of two separate nominal ledgers, total debits v/s total credits, needed to keep a tap on each and every account.
- Nominal ledger accounts provide for making a double entry while journals or daybooks provide for accounting purposes that deal with a minimal number of transactions.
- The information from ledger accounts leads to the creation of trial balance.
- Personal Taxation:
- A form of direct tax levied on a person’s income which includes an individual, partnership, non- juristic body of a person and undivided estate.
- It involves tax liability calculation, file tax return and tax payment on a yearly basis.
- Taxable income requires utmost care by making appropriate calculations so that the taxpayer can regulate the tax levied by making the desired deductions and claiming allowances on the taxable income.
- These measures help to levy the exemption and tax rate without discriminations.
- Retirement and Pension plans:
- With both the plans aiming at making provision for financial security and stability, they aid to continue an individual’s lifestyle without compromising on living standards in today’s world that witnesses high cost of living and rising inflation.
- Both the savings scheme help in financing planned and unplanned expenses incurred during the retirement stage.
- Appropriate pension and retirement plans that provide guidance in placing your post-retirement income in a secured funding system.
- Guaranteed pension plans give the freedom to decide on ‘vesting age’ i.e. the age at which an individual decides to retire and the premium amount one wishes or can afford to invest for payment that will accumulate to a sum obtained on vesting. The payments for tenure can be made on the applicant’s discretion.
- Retirement plan projects towards buying an annuity plan for a lifetime policyholder who receives guaranteed income for life. You may like to read, Tax Strategies to optimize your taxes for US based business.
- As per the need, the account holder can avail for immediate or a deferred annuity. Depending upon the income that the policyholder wishes to receive on retirement, the purchase price can be set.
- Asset protection
- Deals with the planning for the protection of individual assets and business entities owing to significant assets.
- Certain factors have to be considered for availing asset protection in order to apply the desired ‘debtor-creditor law’ as follows:
- The identity of the debtor and liable aspects,
- Nature of claim and assets and
- The creditor’s identity
- Succession plan
- Some planning needs to be invested in employing new members or leaders to replace the previously authorized person for reasons such as leave, death or retirement.
- To secure the personal financial ownership, transfer of guarantee for credit to family or successors and helps to develop creditworthiness.