The Hindu Business Line : A vital balancing act

Sometimes, it pays to keep life simple. Just as much as disciplined spending does. Most of us enjoy several facilities, which the maharajas of yesteryear would have yearned for. We can aspire for all the latest facilities or gizmos, though we may not have the means to acquire many of them immediately.

Once you find a job , you can count on the marketing companies to bombard you with calls. The calls can range from issue of credit cards, loans for two/four-wheelers to the latest mobile phones with a plethora of add-on features.

And, then, it is only a matter of time before the home-loan agents surface ready to convince you to buy a home.

Most banks where your employer credits your salary may be only too willing to lend you money to buy anything from A to Z, once your credit worthiness is established. And, being young, you are also eager to possess everything under the sun that can be bought on credit.

If you engage in a flurry of purchases, the days of organising auto debit facilities and post-dated cheques may not be far behind.

Balancing your bank accounts

At times you may face the sticky situation of your cheques getting dishonoured, landing you in an embarrassing position. And all this may be because you have simply lost track of your finances.

Here is a simple solution to handle this problem. First, try and maintain two separate banks accounts; one to take care of your monthly fixed commitments and the other to meet your day-to-day expenses. You can also ensure that you do not opt for an ATM card in the prime account where your auto debit or post-dated cheques is handled .

The idea is to restrict your access to the money earmarked for committed expenses. You can nevertheless go for an ATM card in the other account, which can be used to meet all your basic needs.

The money to this account can be transferred through ECS from your prime account. By balancing your accounts, you can avoid embarrassments, and build a good credit record.

Please send suggestions and queries to younginvestor@thehindu.co.in, or The Research Bureau, The Hindu Business Line, 859-860, Anna Salai, Chennai-600002.

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