Word ' DINK ' has become very famous in 21st century urban India. This defines 'Double Income No Kids' generation. Generation of people born just before India started it's economic liberalization process in 1991. These are young just married couple, aspirational, living in modern India, spending weekend at swanky shopping malls, using latest gadgets, driving a four wheeler and may be planning to buy a house, which their previous generation would have never thought of so early in their life. This is surely encouraging and gives a strong foundation to domestic consumption based India growth story, but there is other side of this aspect which is mostly ignored : And that is keeping check on spending and start investing early in life.

Most common phenomenon is living or relying too much on credit and finding it really difficult to set aside even a small amount of money for investment at the end of the month because monthly commitments towards EMI for car, home and even the latest smartphone or LED TV take majority part of monthly income. Ever wondered how our parents with only one earning member in the family and mostly larger family size, used to manage all expenses with limited and fixed source of income. Surely inflation has taken its toll and prices have gone up but so has our income level. Today, all luxuries have become necessities and stressful professional life requires higher spending on discretionary spending. What is missing in this generation is the practice to prepare and follow a strict budget.

Sir Benjamin Franklin has said, “ A Penny Saved Is A Penny Earned” and exercise of penny saving starts with a properly defined budget. Budgeting is nothing but to list down all your expenses and source of income on a monthly basis and write it down on a piece of paper or in excel sheet.

As can be seen from above sample budget, even after earning decent income of 63000 per month, this family is not able to save anything at the end of the month. In fact their total expense (both fixed and variable combined) crosses their monthly income and result in deficit of 2500 per month. This requires them to cut down on their variable expenses to bring their monthly budget in balance. List down your entire monthly income across various sources. Divide your monthly expenses in fixed and variable categories. There will be some fixed expenses like EMI payment, Insurance premium, kids school fees and variable expenses like grocery bills, utility bill payment, conveyance etc. There will be certain discretionary spending like eating out, movie, shopping etc. Clear listing down of income and expenses will help you in two ways: 1. To arrive at monthly surplus/deficit amount which you can set aside for investment and 2. Kind of expenses which you can avoid or expenses which need to be cut down. Initially when you start with, you will face problems as many items will be missed out. Therefore it is suggested to carry out this exercise on a monthly basis to make it a habit.

Income - Saving = Expenses :
Another method of inculcating savings habit is to estimate your monthly investment requirement first in consultation with your financial adviser to achieve basic goals in life like creating investment kitty for kids' higher education, marriage, medical emergency and retirement. Invest this amount at the beginning of every month and leave only balance amount in your account for monthly expenses. It is easier said than done but slowly and gradually as you try to follow this, you will be able to put control on your expenses and start investing for your future betterment.

Preparing budget can broadly help you :

• To list down all your expenses and source of income under various heads.
• To analyze type of expenses and where to cut expenses if need be.
• To realise the exact amount of savings/deficit at the end of the month.

Prevention Is Better Than Cure:
Emergency can strike anyone at anytime. Don't forget to create an emergency kitty. How much one should have as emergency fund is a topic in itself for discussion but if you are a salaried individual then funds equivalent to at least 6 months expense and for a businessman funds equivalent to at least 12 months expense should be saved as emergency funds. As you are not going to use this money unless an emergency strikes, you can put this money in liquid/money market funds to earn return better than your savings account.

Some Important Points to Consider:
Try to minimize usage of credit card If used, make sure to make full payment of credit card bill by due date to avoid any penalty/interest charges as late payment charges are on a very higher side in credit card bills. Do not fall into 'Debt Trap' Try to pay off unproductive, high interest bearing loans like personal loan, credit card bill and even car loan as these are the loans which are not used to create any asset. Always remember, no matter how small the amount of savings is, every amount saved and invested can multiply and add to your wealth due to compounding effect.

You may find budgeting boring to start with, but once it becomes a habit, this activity will bring immense benefits in the form of good savings and investments for your future goals. Take inspiration from our mothers who did a commendable job in budgeting and managing our family’s expenses. After all it is for you and your family's financial betterment.

Our fast paced and sedentary lifestyle takes a toll on you and your family's health . Children tend to choose unhealthy and take away snacks over home made nutritious food. Free time is utilized watching cartoons on TV or playing games on mobile/tablet rather than physical activities with parents or other kids. As a responsible parent, you need to step back, take stock and make a conscious effort to steer your family towards a healthy and disciplined lifestyle.

Let us briefly review some golden rules for healthy living:

1. GET UP AND MOVING !

Children require regular physical activity for their overall growth,development and well-being. This also applies to parents as kids look upto to them as their role-model and source of inspiration. Parents who are lazy and unhealthy can expect their children to be fit and active.

2. NO TV !!

Watching TV, surfing the net or playing games on the tablet is leading to a sedentary lifestyle. Kids are becoming overweight and lazy. Screen time should be restricted to max. 2 hours a day. Encourage the child to take part in physical activities or games, either indoor or outdoor.

3. HAVE MORE LIQUIDS !!

Water is the best liquid you can have as it satisfies our thirst and does not have any additives or preservatives which are more harmful to the body in the long run. Similarly, low fat milk is a good source of calcium for kids. Coconut water, which is high in potassium and antioxidants, is an excellent alternative to fruit juices which have a high sugar content.

4. CONSUME MORE VEGETABLES AND FRUITS

They boost immunity and reduce the risk of may chronic diseases. Each meal that your child eats should contain some servings of vegetables and fruits. Fresh fruits can also serve as a healthy snack option rather than wafers and chips. Low fat dairy products and whole grains are also healthy choices for kids. Avoid chips, cakes and chocolate as they contain a lot of fat and and are high in sugar.

Key Takeaway:
An Apple a day keeps the doctor away. A Healthy Family is a Happy Family.

As it is said, well begun is half done. We understand and apply that to almost all spheres of life except may be for investment. Investment decisions taken in early stage of life have potential to transform your financial future. As we all know compounding is the eighth wonder of the world and it works best as longer we stay invested. Also starting at young age allows you to take higher risk and invest in growth assets like equity and real estate. Lets try to highlight a few very important financial/investment decisions which one should take before he/she turns 35.

Buy Term Insurance:
This is perhaps the most basic and most important financial decision one needs to take as soon as he/she starts earning. Buy term insurance first at young age to provide yourself optimum life cover at the lowest premium.

The biggest advantage of buying term cover at young age is to avail higher cover at lower premium. Opt for tenure which covers you till 60 or 65 years of age. In these days many Life Insurance companies has started offering On-line Term Plan, you may look at that option also to avail Term Plan.

Next Step is Health Insurance:
Once you have insured your life with adequate term insurance, next in line is to insure any medical emergency. As it is said you should buy health insurance when you don't need it because when you need it no-one will give you. One obvious advantage is low premium of medical insurance for young individual. This will also allow you to see through initial waiting period of 3 years without any fuzz. Delay buying the policy and you may get afflicted by medical conditions that usually crop up in the late 30s and 40s. Start with individual plan and then convert the same to family floater once you get married and expand the family. Do not rely solely on employer health benefit. In most cases this may not be adequate and remember this will not be available once you retire, the time when the need for health cover will be highest.

Create Emergency Fund:
Even though you are adequately insured there are certain emergencies which insurance does not cover e.g. job loss. Always maintain your 7 to 8 months monthly expense as emergency fund and park the same either in short duration bank F.D. or invest the same in liquid/money market mutual funds or opt for sweep in savings account. This fund will come handy in case you decide to take career break for higher studies or lose your job or prolonged medical treatment.

Start SIP:
Once you are adequately insured and have created an emergency fund, its time to hit the investment highway. Remember compounding works best in longer time duration. Start investing in growth asset like equity through mutual funds SIP route. Always remember, no matter how small the contribution is, compounding works wonders for your portfolio. Just consider this. An amount of Rs. 5000 invested per month, growing at 12% can create corpus of Rs. 1.54 cr in 30 years. The beauty here is your capital investment is only Rs. 18 lakhs and your money is multiplying by 8.5 times. If you delay starting of SIP by just 4 years and give your investment 26 years instead of 30 years, you end up loosing Rs. 54 lakhs as your corpus after 26 years will be only Rs. 96 lakhs. Even small amount of Rs. 2000 invested per month will give you Rs. 62 lakhs at the end of 30 years. So don't hold back and start investing with whatever small amount you can because remember even Rome was not built in a day.

Create Appreciating Asset:
Leveraging is not recommended in the investment world which but one can leverage to create appreciating asset like residential property. Borrowing at early stage of your life to buy house can help you paying off housing loan early which allows you to buy second home for investment which can provide annuity in form of rent for your retirement years. e.g. typically home loans are of long tenure, 15 to 20 years. So if a 30 year old is taking a home loan for 15 years he can pay it off by the time he will turn 45. Remember for a working professional, decade in his 40's is the peak of his career in terms of professional growth and income. This can allow him to buy another property and even if he takes another home loan he can easily pay it off by the time he retires.

In India fortunately we get tax deductions on home loans. For self occupied homes, the borrower gets tax deductions under section 80C for principal repayment of up to Rs. 1 lakh and for interest repayment upto Rs. 1.5 lakh under section 24. Even for second home purchased as investment one gets tax deduction on the entire amount of interest paid. These tax advantages make home loans very attractive particularly for borrowers falling in 20% or 30% tax brackets. But remember that your monthly EMI should not exceed around 30% to 35% of your take home salary.

The 5 point agenda which we discussed is simple to understand and implement. There is no rocket science involved in this. But many of us fail to implement these simple steps to provide headstart to being financially secure. Being secured against risk through adequate insurance and having started SIP at early stage of life will allow you to take higher risk as you go along and reach financial 'nirvana' by the time you retire. So without waiting for a next minute lets make this resolution of taking right and important investment decisions to give your financial journey a headstart.

Managing personal finance for most business owners is inseparable from their business finances, especially in case of small and medium sized business owners. This alliance between personal and business finance is usually formed in the initial or the startup ages itself, and continues long after extensive diversification.

This unique situation results in some unique challenges in business owner’s personal financial management, though, many other challenges are much similar to those of professionals earning a regular salary. Some of the major challenges unique to business owners include:

• Lifestyle changes in correlation with business cycles
• Lack of thought on retirement
• No thought over succession of business
• Stability and continuity of family support in case of losses in business

While, many proprietary business owners have thought of flexibility in their lifestyle and maintain it as such, ask them of their retirement plans and their answers would be somewhat like these:

• Who says I’ll retire?
• My son will handle the business, and I’ll be simply less involved.
• The family HUF runs the business, it’s a going concern or
• “…Blank…” as they never thought of it.

In our country, where most established businesses are family owned, it is easily and obviously assumed that children will take over the business slowly and will look after if the owner retires.

All these issues including the common personal money management challenges can be looked upon and tackled differently based on the stage of business. These three stages are:

1. Startup Stage
2. Growth Stage &
3. Established Business Stage

Personal Finance Management at the Startup Stage
This is a perfect stage to start on the path of personal financial management along with the business. Incorporating the business in a way so that the risk and liabilities remain harmless for your family’s financial situation is the first step. Though, starting a business in the early age would be the make it a perfect combination of business and personal lifecycle, the same may not always be the case, so what if you happen to start a business in one of the later stages of your life? The first rule of startup applies - incorporate your business keeping in mind the business cycle and the type of risks involved.

For example, a retail store started at a later stage in one’s life can simply follow the proprietary ownership, but for those in the early stage would likely want to see their business grow and expand. One retail store may not have lot of risk but expansion will certainly bring more risk and income along with it, in such case it is better to start it as a private ltd. venture rather than a self-proprietary one.

How does it help in personal money management? Here’s your answer:

Later Stage of Life: Financial situation in later stage of your life is likely to be much better than those in an early stage:

• You probably have built some assets and have acquired a net-worth even if not substantial.
• You are likely to be the biggest investor in your venture.
• Sole proprietorship will give you much needed tax relief by treating you as an individual tax payer.
• Variations in your income will not affect your family’s lifestyle much due to the presence of other financial assets.
• Finally your dependents are most likely to be in the final stages of being settled in their lives, therefore, leaving your financial responsibilities back at home relaxed.

Early stage of Life: At this stage, most of the money you invest in the business is borrowed, and with very little equity of your own you have little coming out of it at this stage:

• Partnership or Private limited company comes as a best choice.
• As you may choose to derive a steady income from your company
• Employ some of your closest family members to help you take the establishment further and at the same time enhance the take home without being taxed at high rates
• Such structure allows you to expand your business the way you want and still retain much of the control over it.

For the businesses running in the growth stage or the established stage (inherited businesses and or business started earlier in your lifetime), the challenges are similar to those faced by salaried people climbing corporate ladder in their early stage of career:

• Increasing family responsibilities
• Pressing requirements at work
• Time is mostly spent in planning and executing business needs
• Less or no time to tend to personal financial matters

For those hitting this stage of business early in their personal lives problems will be multifold and with today’s fast paced environment, financial mistakes are more likely in spontaneous decisions. Therefore, involving a professional financial planner / wealth manager would be the best idea to work with for your personal financial management.

Personal Financial Management at Growth or Established Stage
Further for all business owners following golden rules will help in building their personal wealth without the aftereffects of the business cycle:

1. Keep Business and Personal Accounts Separate:
Being organized and disciplined may be tough, but business is one area where it really pays off well. Being organized is the first step towards it, and having separate business and personal checking accounts is a huge advantage in this case.

2. Minimize your tax liability:
Decide the most tax efficient compensation method in case of a limited company ownership. Get professional assistance for tax planning for business and start early each year for personal tax savings. Keeping your account books clean and advance planning will assist your transaction decisions in business. Advance planning for your personal tax savings will provide you enough time to save while your business inflows are higher and avoid last minute rush, including some bad decision making. Remember that early decision have exponential effect on your future financial position.

3. Build a contingency fund
We all want to be happily indulging in merrymaking during the good times, and during the bad ones we try to save even on the daily veggie purchases. As a business owner you would want to avoid this and decide on a contingency fund for your household expenses, including one for your business. Just keep them separate as discussed in the first suggestion.

4. Think and start saving for Retirement / Succession of Business:
It’d be great if your business can become your best retirement saving as it happens in the west, or more developed economies, in India it might still be a big turn off. The best thing to do is to start saving for your retirement while your business is running and growing. In case your plans are to ensure continued growth and function of business through succession, you need to start grooming the next person you would want to take charge of the business. Your children could be the best option but in case they have other plans there is no harm in grooming another key person for the job, while you maintain your shareholding (best for limited ownership companies).

5. Insure Yourself and Family Adequately:
Finally, the most important of it all Insurance, Life, health, accident and critical illness like contingencies can take a toll on your dreams and your dependents future by straining your finances. Best is to cover yourself and other key family members adequately though insurance policies for these risks.

6. Plan For Your Family’s Goals: Planning is an integral part of any business, especially at the startup age, but it is equally important for personal goals and aspirations regardless of the stage of business. This will provide you real sense of responsibility and will give a roadmap to achieve your goals objectively. The greatest benefit of planning is you will always know:

• How much you must save?
• What is your spending limit?
• Whether a short term aspiration hampers one of your responsibilities?
• How much you should target for in your business?

These six steps are not the limit of it but surely this will give your personal financial management a boost while you focus on running and growing your business.