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Understanding And Handling Finances At Home

Aarti Tibrewala Darooka

Entrepreneur, Financial Literacy Advocate 

A chartered accountant and MBA, Aarti is an entrepreneur and financial literacy advocate. She has over 15 years of combined experience in the consulting, advisory and travel industries. A national ranker in CA, Aarti is a published author, who has written a plethora of books for children’s financial education and is currently helping build awareness for financial literacy for women through her platform, Sthreedhan.


Roshni is a banking professional. She has been with the same company for almost 8 years and has a very stable career. There is no pressure to get married, but she has been in a steady relationship that her family is aware of and the wedding will happen when they are both ready for it. She has been contributing to the family’s monthly expenses since she started working but has little clarity on her family’s finances.

Roshni is the older of 2 daughters and has been trying to take responsibility for her parents as best as she can. But they do not involve her in any discussions related to money and have not given her or her sister any clarity on where they stand financially. The family doesn’t want for anything and is stable, but not overly well-to-do. The complication comes from the fact that her father is in a partnership business with an associate and they have both been running the business together for over 30 years. Her father’s business partner has a son who has also recently joined the business and therefore has better clarity on where things stand in the business. This worries Roshni as she feels that if anything goes wrong between her father and his partner, he could get a raw deal.

Roshni’s father suffered a heart attack recently and is on a path to quick recovery. This has, however, further exacerbated Roshni’s worries, bringing sharp focus on possibilities of all that could go wrong should they not know more about money matters related to the family. Now, after much nagging, Roshni’s mother has also begun to understand how not knowing anything about her husband’s finances and his business could negatively affect their future and deprive them of their rightful dues. 

The problems they face include the following:

  1. They don’t know what all Roshni’s father owns other than the house they live in and some investments which are in her mother’s and the daughters’ names.

  2. They don’t know what the terms of the partnership are between her father and his associate. Therefore, if something were to happen to her father, they would not know how to get their share from his business. 

  3. They don’t know who owes money to her father and to whom he owes money.

  4. Also, their father who is a prudent man when it comes to saving and investing money, has not told them where all he has invested his money.

All of this means that there is a sizeable amount of wealth accumulated by Roshni’s father that is at risk due to the family’s lack of knowledge regarding the same. While Roshni and her sister are capable of taking care of themselves, what about her mother? Will she have enough to fend for herself later in life? What should Roshni’s father do to ensure his family knows what they own and what each one should get in case of any eventuality?

The answer is very simple. Roshni’s father pays income tax in his personal capacity. So, although it is not mandatory as per the Income Tax Act, he should maintain a detailed balance sheet that has a list of his investments, payables, receivables, loans given and loans taken among others. 

The balance sheet should also have a mention of what money he has invested in his joint business and what he is owed by the business at its current valuation. This will give his family an idea of where they stand. In addition to this, he should ensure that his wife/children are updated on the status of the business and receive the partnership deed copy along with the latest financial statements of the business. This will tell them what procedure is to be duly followed to help them get his share of the business in case of any untoward incident in the future. The partnership deed is meant to help solve any such problems in the future.

It would also help if Roshni’s father prepared a will that listed out what each of his survivors will get after his death. This will not only reinforce the contents of his balance sheet but also prevent any kind of clash or confusion at the time of settlement of his estate. While no one wants to have to see this day in their lives, no one lives forever, and a will only helps to sort matters out when they can still be sorted. Also, we save more for our children than we do for ourselves. It only makes sense that we ensure they get their rightful due when the time comes. After all, as Winston Churchill once said, “We make a living by what we get, but we make a life by what we give.”


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