Every parent must teach their children to take care of themselves; stay healthy by eating nutritious meals on time, be security conscious, be productive, copy and guardedly protect their important documents and prioritize tasks needed to accomplish preset goals. Setting goals and listing the necessary tasks will drive decisions and avoid emergencies (unscheduled responsibilities). It is therefore these decisions (description of each task, activity and reference to other related tasks) that must be structured by category, by date and time and financial amount, in order of importance.CATEGORY – Expenses; Sub-CATEGORIES – Rental Accommodation, Transportation, Telecommunication, Food, Toiletries, Medicine, Utilities. Listing daily, weekly, monthly, bi-monthly, quarterly, semi-annually and annually expenses will get a realistic and accurate accounts of basic living cost. The undocumented cost, such as unplanned travel and entertainment, will lead to cash flow problems and the need to borrowing either by depleting savings or creating debt under the liabilities category.
CATEGORY – Income; Sub-CATEGORIES – Salary and Deductions at source (taxation & insurances), Bank standing orders. Understanding and planning for fixed weekly, fortnightly wage or monthly salary and the related mandatory deductions made by the employer for taxation and insurances. The non-fixed or flexible income, such as commissions, is more difficult to plan for but over time, this will become easier as a routine develops. Also, planning for charges and standing order (normally amounts placed into saving or investment accounts or to purchase additional life insurance) deducted or pay directly at the bank. Take home pay is the amount left after all these fore mention deductions.
CATEGORY – Fixed Assets; Sub-CATEGORIES – Clothes, Personal Items (jewelry and collections), Furniture, Appliances, Cell Phones, Vehicle, House. Recording fixed assets as at purchase date and price and depreciating this value over the perceived life of the particular assets. Noting that most fixed assets create a maintenance expense and simply recording the replacement price of such an item will help to save to replace it. In the case of some fixed assets including real estate, which is self used, a timely evaluation done by an expert will guide the capital gains or losses.
CATEGORY – Liabilities; Sub-CATEGORIES – Loans (bank & personal), Mortgage. Necessary borrowing firstly, for the purchase of fixed assets such as a mortgage for real estate, secondly, for income enhancement for example a loan to build a rental apartment, and finally and as a last resort, to meet short-term expenses until income grows such as being on probation or for the period on contract between payments.
CATEGORY – Current Asset; Sub-CATEGORIES – Cash, Bank, Credit Card Account (automatically deducted bank charges). After depositing income and meeting expenses, these accounts guide the decisions to save, invest, purchase fixed assets or borrow.
Things to do generally & This Week: Prioritized by date and generated from selected categories and sub-categories must refer to the cost and the time. These examples should also guide your filing system.
Rationale
T.A.J & Associates Company Limited uses this occasion to comment on topics that have been covered, both academically and by the mainstream media, to add its opinion and point out investment opportunity, not to invoke any social action.
