How to get financially organised
A practical guide for a digital lifestyle
I am a guy who is on the road all the time — I travel both nationally and internationally all the time and just like the average Joe (or Rama/krishna — take your pick), I get my regular set of bank statements, taxes and all the wonderful things that everyone gets by email.
So how do you figure out what is your advance tax payment on December 15th (you knew that was the due date right?) if you are sitting in a hotel room in a remote city away from home? All those statements are safely filed away in your home while you are on a critical 2 week business trip that falls on the advance tax date!
Step 1 : Get your ecosystem to be digital
Get a tax accountant who can actually communicate via email : Yes this is important folks — they know their Form 16As but when it comes to email, there is a real challenge for you. Talk to them, test them out with a few emails and make sure they do check on a regular basis and respond back to you. If you cross that first hurdle, you have got a great start.
Step 2 : Get a Good scanner app on your phone
When I am vaulting around the world, nothing beats the advantage of my wife sending me an e-mail with a couple of JPEG attachments saying — “hey I got these in the mail today — they look important — what do you want me to do ?” instead of “I received a letter from the tax department about your credit card. I just put it in your file! You can look at it when you get back”. If you combine the Step 1 with this, I just forward the scanned attachment to my tax consultant with a note asking him deal with it while I am stuck wherever I am!
Step 3 : Setup a separate email account for all financial transactions
Instruct all the banks and mutual funds to send everything ONLY electronically and to this email account. The power of searching through your email to find a pesky transaction is something you will wonder how you managed to live without for so long.
Step 4 : Get Veracrypt
Veracrypt is this wonderful piece of encryption software that will create a “virtual drive” where it will store all your sensitive documents in a secure manner. Once the drive is “unmounted” all your content comes in one single big blog of encrypted data. Veracrypt has undergone a formal software audit .
Its a wonderful piece of encryption software that I have trusted my financial life to! I am not associated with it in any way (I am just jealous that I didn’t invent it) its open source, very stable , haven’t lost data on me so far (over 10 years). Read the documentation carefully, set it up and keep all your important documents inside it. You would be dumb to keep it on your harddisk without protection. So you have been warned!
Step 5 : Digitize all your key documents
PAN cards, tax filing from last year etc.. etc., — You know what is important to you and even if you don’t think it is not so important, go ahead and do it anyway, harddisk is cheap and Veracrypt can hold lots of data securely! The biggest advantage — if you ever need that “Xerox copy” the nearest printer is your best friend!
Step 6 : Track big spends manually
Prepare a spreadsheet on key large transactions for the year — when did you do it, which account, which cheque number, why did you do it etc., You can get a set of such transaction through your bank’s online portal. Keep this spreadsheet in your truecrypt volume.
step 7 : Track big revenues manually
Keep another spreadsheet on the stock transactions that you did — helps to deal with those pesky tax returns quickly! Send it to your accountant by email and tell him to figure out the taxes!
step 8 : Backup the truecrypt volume
Backup REGULARLY in multiple locations — Dropbox, Home PC, your pen drive, your spouse’s pen drive and one more placed in a safety locker — trust me hard disks crash ALL THE TIME.
That’s all folks — you are ready and better organized than most financial institutions!
If you really look what I have preached here, the trick of the trade is to go electronic and combine it with a good search and you can get answers faster than taxman comes asking you questions! Not that you should not keep the hard copies but just don’t depend on being able to quickly find out the details!
Good luck and get organized!
