Are you a member of 100 passwords club? Quite definitely.
Based on average experience that if you are a family of 4 including yourself, spouse & 2 children you may well have about 100 accounts and thus passwords or keys or documents to take care of. You are a member of this club even if you have not realised this so far.
Wondering how?
Here are some examples to have you start counting family accounts. These might be bank accounts, bank lockers, fixed deposits, OD accounts, mutual fund folio's, demat accounts, share broking accounts, investment accounts like PPF, NSC, NSS, KVP, bonds, credit cards, loan accounts, insurance policies etc. Statutory and business accounts like income tax return filing account, TAN account, TDS, service tax, VAT etc. Personal accounts like email account/s, frequent flyer account/s, other loyalty and online account/s & shopping related account/s, utility accounts such as gas, power, telecom etc; as such the list may turn out to be really long. Question to consider; Is it only you who is aware of these accounts? Are you are the only one who operates some or all of these accounts?
There is no escape.
We live in a world and time where we cannot help having a long list of accounts. Every entity we deal with wants to identify us in some way or other. What does this mean? We need to maintain, safeguard and protect our little complex web of accounts and information. Irrespective of who claims what, in my experience our data is just not secure. We are far more exposed than we can imagine.
While some accounts may not have any direct material consequences you might be shocked how complicated life can become with someone simply accessing your email, sending out malicious messages, misusing your documents, your credit card/s cloned, loans availed by fraudsters in your name etc.
Multiple accounts also mean multiple problems and these days we are unfortunately at the peril of customer care executives in a call centre located at some corner of the country who generally know nothing and may not resolve anything.
How are you going to prove that you are right at all such instances? Ultimately the real problem comes down to protection and transfer of such accounts and related information. Needless to say the worse action in this regard would be inaction.
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Protect yourself.
1. Make log of all accounts with all related details
2. The best place of making such log in the current might be your PC. This is best because passwords these days need to change all the time. Managing this manually can be really messy.
But be careful here; when you send it to the workshop for servicing or problem resolution. Before giving control of your PC to someone else back-up key data elsewhere.
3. Maintain a file. Make sure you store a physical hard copy print of your account.
All you need is just 4 Sunday's in the whole year.
4. Close unnecessary accounts, especially bank accounts.
5. Get your CIBIL report. Do this half-yearly. Raise alarm bells/ raise disputes/ initiate legal action immediately as the case may be.
Are you ready to die tonight?
Unless we are about 70 or so in age and faced will some life threatening disease or illness we generally do not think a highly depressing event such as death. But I insist, just for a moment, pose this question to yourself. Do you have an answer?
Financial Planning has an answer. Book-keeping.
The planner would advise you on both; the tiniest and the very important matters;
1. How to create, manage and use your bank accounts
2. How and when to take credit cards, other loans and liabilities
3. How to manage and prepay loans
4. How to segregate and consolidate various accounts
5. How to plan asset transfer nominations wherever possible
6. How to avoid potential issues such as IT notices and scrutiny. A word of advice here. Do not cut corners.
Instead of paying someone Rs 300 to file your returns hire a CA or financial planner to prepare your personal balance sheet, maintain personal records and do book-keeping.
7. How to maintain documents and records especially if you are a professional or self employed.
Immediate benefits of such planning can be such that you can have assets transferred to the person/s as per your wish and immediately upon your death. If you have a Will you could bypass legal execution and if you do not you may not need to get succession certificate for transfer of many of your assets.