2010 Goals Tracking - January End

These are my goals for 2010.
1)Continue learning new dishes to cook. One new dish per week.
2)Continue to be on budget.
3)Start saving for prepayment of mortgage. 2L should be saved for same.
4)Contribute to retirement as per the plan.
5)Be less obsessive on daily tracking of things.
6)Learn to swim.
7)Improve healthy eating.
8)Earning Rs 50250 (2010*25) extra in 2010

It's January end and let's see how am I fairing in these goals.
Goal 1 - Cooking - FAIL. Hardly cooked anything whole month.
Goal 2 - Budget - PASS.
Goal 3 - Save for Mortgage - Don't Know- started to save for this goal.
Goal 4 - Save for Retirement - PASS - I never miss this, touch wood.
Goal 5 - Obsession for tracking - FAIL. No comments please :(
Goal 6 - Swimming - Don't Know - This can only be done in summers.
Goal 7 - Healthy Eating - FAIL - I'll write a post about it someday :)
Goal 8 - Extra Earnings - Don't Know - Will be able to say only after seeing progress in few months.

Is being rich same as being cheapstake?

Reading an article on Time's money named "Guess Who's Cheap? People Who Know Lots About Money" provoked a thought inside.

I always hear lots of people complaining that "more money one have, more miser that person is". I think there are two perspectives of this:

1) As article talks, probably most of the rich people have become rich by saving their hard earned money, so they don't want to waste it. They have learned it by experience that every penny saved is much more valuable then penny earned, so they value savings and detest un-mindful spending.

2) Secondly I think psychology also plays an important role in their behavior. It’s very easy to spend small sums but very difficult to break a big sum to do a small purchase. For example if one has 10 Rs note and want to buy a 5 Rs item, many will not think even twice before buying the item. On the other hand, if one has 500 Rs and someone will tell them to buy a 5 Rs item with it; their mind will resist this purchase simply because it will be same as paying losing Rs 500 for Rs 5 item. I think this psychology plays an important role in why richer people are generally much conserved with their spending.

Happiness vs Money

Recently I was watching one of the episodes of Big Boss. Co-contestants asked Bakhtiyar how much money according to him is sufficient for one month and he answered one crore. Did I heard that correctly? Does he really mean 1 crore per month, that is a one followed by seven zeroes?

Do you really need that much money to be happy? Well that’s what he wants and I of course should not be judging him. But this conversation really made me think about this. How much money do I need to be happy or is it really money that is going to make me happy or is it am I really not happy currently?

Thanks to my God, I have all my answers. No, I don’t need money to be happy or its not money that’s going to make me happy. I am quite content with what I have currently. I work hard for a financially secure future.

I am very clear in my thoughts that money can make one’s life comfortable or miserable. But there are many rich people I know whose life is very miserable and loads of not so rich families exists who are very happy, content and comfortable in their lifestyle.

To be happy, one doesn’t need huge paycheck every month. Rather, one needs a balance life, a good family, a healthy body, peaceful mind, work to do that you love and some basic amenities.

May, all human beings get blessed for these things for rest of their life.

Psychology of Retailers

I read an article recently at “It’s Your Money”, which talked about that restaurateurs are using menu psychology to increase the profit. It’s not only them, I remembered reading many other instances where organizations use such measures to promote sales, to increase their profit and to sell exactly what they want.

1) I remember one of the corporate trainer once narrated this instance: When Close-Up entered in Indian market, Colgate was number one brand in tooth pastes and it was very difficult to beat them. Close-Up came up with a unique advertisement which said that “Only Half the Brush is what it needs to clean your teeth.” Campaign was a huge success and more people started using Close-Up, but profit never showed that success. After more brain storming they realize that because now people are using less toothpaste, its lasting for long, hence more users but still same number sales. They increased the diameter of paste’s tube and profit increased in proportion to sales.

2) In one of the management subjects I studied in graduation, I remember one of the case study where they revealed that keeping women cosmetics close to diapers in a super mart increases its sale as well.

3) Also, one of my friends who worked part time in one of the Indian super mart, Big Baazar, once told me that they keep small items like dusters, chocolates, mints, etc near the counter because they have huge margin. While customers are waiting in line for their turn, they look at those low cost items and decide to buy it without giving much thought even if they don’t need it.

Menu Psychology might be a new concept for restaurateurs, it's not new for retailers in general. As a customer, you have to be responsible for your money. No one cares for your money more than you.

Changes done in life

This is more of personal update kind of blog.

About 17 months ago, I listed things that I always waste my money on. I would like to see whether that listing has helped me to curb any of my bad habits or not. Here is the update

Wallets - I bought only one new wallet since then and yes got two new as gift. I'll count it as a success, because I curbed my urge to spend on this on my own. (Score: 1/8)

Strange Dresses - I took 2 trips since then and have not bought any traditional dress at any place. I also curbed to buy lovely Japanese Frock so many times. (Score: 2/8)

(P.S. I loved something similar to shown in photograph, in red color).

Key chains – Have not bought any new keychain since then but got 2 as a gift. To compensate, I have given away approx 20 key chains from my collection. (Score: 3/8)

Balloons – No more balloons for me. Wow. I am doing well. (Score: 4/8)

Handcrafted Stuff – Very hard to resist and I failed badly. I Bought lots of handcrafted stuff to decorate my home. This is a sure shot failure. :(

Sun Screens – No new sunscreens bought since I listed that I have fetish for them and also got none as a gift. Success. (Score: 5/8)

Gifts – No Comments. All I can say is: "Few Habits Die Hard". ;)

Stationary – Not even a penny spent here. Wow. (Score: 6/8)

Final Score: 6 out of 8 have been controlled. That is the fun of listing things down. If things can be seen in black and white, they can be worked upon.

Happy Republic Day

India became independent on 15 August 1947 and became republic on 26 January 1950. We get a holiday on this day. As a kid my ritual of the day used to be getting up at 8 and switch on TV, and this continues till date.

I love watching India Gate and all the proceedings there. Then that 3 hour long parade where forces, culture all conglomerate to display diversified India. I love it. I can do it 365 days but 26th January is special day to do this.

I am going to take an off from writing today, and just pasting some of my favorite photographs of the day.

Happy Republic Day to everyone :)

"w" shaped recovery - how to save yourself

I read an article on rediff today that talked about dot-com bubble in past and how current rally in stock market can actually be a sign of another bubble formation.



This is not the first time that I read about this. In past also, I read several articles that talked about why current recovery in world's economy can be temporary recovery. It is merely caused because of several stimulus packages launched by various country's govt. This is going to be a "W" shaped recovery and so on and on.

Reserve Bank of India for now might be denying any such bubble formation, but last decade proved that no one can actually predict bubble formation and bubble burst time. Timing the market to take advantage of such bubbles is most dangerous to one's financial health. But does that mean that one should stop investing altogether?

I think the right thing to do will be "set realistic goals". By realistic goals I mean don't expect that each time you invest in equity market, your money should double in 1 year. Look at long term returns of the market that comes out to be somewhat 10-15%. Expect only these returns and stay invested for longer time.

Also, do balanced asset allocation. Remember the famous quote "don't put all eggs in one basket". Save something in secure assets, have some exposure to gold, some exposure to real estate and some in equity. That is what will keep you financially healthy and not any speculation!

Have appropriate insurance so that in case something wrong happens, you and your closed ones can survive.

And last but not the least, review your plan, goals, progress periodically and do necessary changes.

World's Changing Economy

Global economy is changing for sure. As two of the major headlines in TimeOfIndia,

"Ratan Tata eyes US Market with revamped NANO" and "Toyota banks on India for Growth".

Yes that's true. Indian Companies are all set to storm the world and world's best companies has realized that India is THE next destination.

Loans - Risk in becoming a guarantor

We Indian generally give priority to relationships then to money. Lending money across family, helping each other financially in needy time is very concepts in Indian family.

I personally also know of some incidents where senior family member will act as a guarantor for loan of the other guarantor. When I read the article on rediff on same concept, then I realized that becoming guarantor can be a risk.

It explains how banks will ask of guarantor when they think that person seeking loan might not be capable of paying it back. In that case, guarantor is legally bound to make payments in case original borrower defaults his/her payment.

So, though it’s good to help others in time of need, but please double check before becoming someone's loan guarantor.

NEFT vs RTGS

This is the sixth and last post in the series of Jargons of Online Banking.

Time Limit:
In NEFT, settles the transactions in batches. The settlement takes place at pre-decided points of time. All transactions are held up till that time. Any transaction initiated after a designated settlement time would have to wait till the next designated settlement time. Contrary to this, in RTGS, transactions are processed continuously throughout the RTGS business hours.

Charges:
Sender might have to pay up to Rs 25 in case of NEFT and up to Rs 50 in case of RTGS.

Minimum Limit on amount of Funds Transfer:
RTGS need that funds transferred should be at least Rs 1 Lakh. There is no such limit in NEFT transfers.

Maximum Limit on amount of Funds Transfer:
No Limit on any of them.

RTGS

This is the fifth post in the series of Jargons of Online Banking.

RTGS stands for Real Time Gross Settlement.

It is a fund transfer mechanism where money transfer takes place from one bank to another without any waiting time or in real time. Transactions are settled as soon as they are processed.

It is primarily for large amounts, where minimum amount is supposed to be Rs 1 Lakh.

RTGS transfers can be initiated anytime between 9 AM to 4:30 PM on weekdays and 9 AM to 12:30 PM on Saturdays.

Receiver of the funds has not to pay any charges. Sender might be charged up to Rs 25 for funds transfer up to Rs 5 Lakhs and up to Rs 50 for funds transfer requests exceeding Rs 5 Lakhs.

Not all the banks are yet supporting RTGS; latest list can be found at RBI's site.

How NEFT works?

This is the fourth post in the series of Jargons of Online Banking.

In last blog, I made a note of some FAQs for NEFT. Let's explore now how NEFT works in detail.

NEFT works as following:

Sender has to provide details of the intended receiver to the bank. This is usually done by "Adding the Payee" in online banking link.

Sender has to initiate the funds transfer either online or by filling in the form available at the bank branch.

Bank prepares a message and sends it to its pooling center in Mumbai.

Pooling center sends it to NEFT clearing center (operated by RBI, Mumbai) so that it can be processed in next batch.

NEFT clearing center sorts the request destination-bank wise and prepares to receive funds from originating bank and give them to destination bank.

Messages are forwarded to destination banks through their pooling center.

Destination banks processes the messages and credits the receiver accounts.

Click on the picture below to see the flowchart of this flow.

NEFT - FAQs

This is the third post in the series of Jargons of Online Banking.

NEFT stands for National Electronic Funds Transfer. It facilitates electronic transfer of funds across various banks. Currently, not all the banks and branches are NEFT enabled. Latest list can be found from RBI site.

The NEFT system takes advantage of the centralized accounting system in banks. The account of a bank that originates or receives funds transfer instructions is operated centrally at Mumbai. However, the branches participating in NEFT can be located anywhere across the country.

Presently, there are six NEFT settlements at 9 AM, 11 AM, 12 PM, 1 PM, 3 PM and 5 PM on week days and three settlements at 9 AM, 11 AM and 12 PM on Saturdays. You must have noticed banking sites to be extremely slow on these times. :)

As per the RBI guidelines, receiver of funds through NEFT cannot be charged. Sender can be charged Up to Rs 5 for transactions up to Rs 1 Lakh and up to Rs 25 for transactions of and above Rs 1 Lakh.

Money will get credited in the receiver’s account on same day or next working day. In case there is any complaint regarding this, contact RBI's Customer Facilitation Center here.

IFSC codes are used to identify various banks-branches.

Tomorrow, read out to know how NEFT works.

What is IFSC Code

This is the second post in the series of Jargons of Online Banking.

IFSC stands for Indian Financial System Code.

It is used as the addressing code in user-to-user message transmission. The Payment System Applications such as RTGS, and NEFT developed by the Reserve Bank of India use these codes.

The code consists of 11 Characters - First 4 characters represent the entity, Fifth position has been defaulted with a '0', and last 6 characters denote the branch identity.

When all the bank branches participate in electronic payment systems, they would need to have a single identifiable unique code and IFSC would serve the purpose effectively.

IFSC code list can be found here. It seems RBI has not put this list on their site. Or if I am unable to find it, please help me.

What is MICR Code

This is the first post in the series of Jargons of Online Banking.

MICR stands for Magnetic Ink Character Recognition. It's a technology to process cheques. In cheques the bottom area is called MICR band and has MICR code next to cheque number.

1) Cheque Number - It will be of first 6 digits in MICR band.
2) MICR Code - It's a 9 digit code. It constitutes a code to represent city, band and branch (3 digits each). This nine digit code is unique for any bank-branch combination.



Click on abpve photograph to see it enlarged.

Please note that MICR code cannot start with 0. If your cheque shows MICR starting with 0, it implies that it is wrong, probably because your cheque is At Par cheque.

MICR Code of all the Indian banks can be found at RBI's site here.

Online Banking - Introduction of Jargons

Online banking or Internet banking generally throws some of its own jargons.
I'll be hosting a series on this blog where I'll try to share my notes of some of those jargons.

Jargons covered will be:

MICR Code

IFSC Code

NEFT

How NEFT Works

RTGS

Neft vs RTGS

Stay tuned to read more about them.

Auto Expo 2010 - Summary

India is a market of small cars. It is the market that was dominated by Maruti at one time primarily because there were no other players in the market. Then came Hyundai and now Santro and i10 are among favorite Indian Small Cars along with Maruti 800, Wagon R, Zen and Swift. Last year TATA launched Nano, a proud Indian small car.

This year auto expo just proves that world knows that India is going to be Hot market in coming years and that's the reason Auto Expo 2010 has so many small cars from Huge Car manufactures from all across the globe.

Few of the names that have bent the rules to make small cars for India are:

1) Our very own Maruti Suzuki
2) Toyota
3) General Motors
4) Honda
5) Volkswagen
6) India's proud TATA Motors
7) HYUNDAI

Also, there are various luxury cars and SUV being launched in Auto Expo 2010.

India's journey has just begun and I am once again proud to be an Indian.:)

Reducing Eating Out Budget to One - Third

2009 was year of pay cuts and recession. There was only bad news everywhere. Layoffs, budget were very common things to discuss.

I was fortunate enough to survive without any pay cut or layoff but my DH took a pay cut of 20%. Since we manage our finances jointly, it was sure to impact my budget. We are not living paycheck to paycheck, hence this pay cut didn’t mean that we need to borrow money for daily needs, but it meant one of the following two things:

1)We need to slow savings for goals and future.
2)Or we need to cut down expenses to accommodate this reduction.

We opted for the tougher one, i.e. reducing the expenses. Taking a glimpse of our monthly spending, we knew the places where we should be able to cut without much effort and they were:
1)Eating Out
2)Petrol Cost
3)Electricity Bill

We were spending around 3-5K monthly on eating out, excluding the lunches that we both eat at our work places. I planned that it has to go to 1K monthly and I also have to reduce lunch cost at workplace.
1)I started packing dinner leftovers for lunch.
2)I started packing some fruits to work, to avoid urge to buy the snacks whenever I am hungry.
3)DH can’t eat packed food, so he continued to pick his lunch fresh from cafeteria at his place.
4)I was a bad cook or rather not a cook at all. I started to learn cooking. I subscribed to Tarla Dalal and Sanjeev Kapoor’s site and started trying the recipe that I used to get in email each week.
5)For basic dishes, I found recipes through Internet and started trying same.

First two measures reduced our 6K personal charges to 4K, saving me 2K and last two changes helped me in more then one way. I have become a much better cook in the process of saving money and we are eating healthy. Thanks to Tarla Dalal , now I am capable of making a 4 course meal for my DH. :)

NSC - National Savings Certificate

This is the fifth and final post of the series and covers NSC.

1. What is NSC?

NSC stands for National Savings Certificate.

NSC can be bought from any of the Post Offices.

It is available in denominations of Rs 100, Rs 500, Rs 1000, Rs 5000 and Rs 10000.

They cannot be en-cashed prematurely.

2. What is interest rate of NSC?
8% is the current rate of interest though it can vary with time.

3. What is the lock in Period?
Lock in period is 6 years.

4. How to get the money back?
After lock in period money can be refunded back to main account.

5. Is interest accrued on savings is Taxed?
Interest earned through NSC is taxable.

Our lohri celebrations of last year

Lohri is one of my favorite festival. I don't wanna post anything today, so find here some of the photos of my last year's lohri celebrations.

front view of our bonfire

view from terrace

when we ended our celebration

Lohri

Happy Lohri to me and all of you

Its an Indian harvest festival, North Indian to be specific, which is celebrated on 13th January every year. It's celebrated in night, when family and friends all get together in outdoors and have a bonfire. Everybody revolves around bonfire 7 times and offers peanuts, popcorns and sweets to bonfire. This is followed by loud punjabi songs and dances.

One of the most famous lohri folk song goes like this:

Sunder mundriye ho!

Tera kaun vicaharaa ho!

Dullah bhatti walla ho!

Dullhe di dhee vyayae ho!

Ser shakkar payee ho!

Kudi da laal pathaka ho!

Kudi da saalu paatta ho!

Salu kaun samete!

Chache choori kutti!

zamidara lutti!

Zamindaar sudhaye!

bade bhole aaye!

Ek bhola reh gaya!

Sipahee far ke lai gaya!

Sipahee ne mari eet!

Sanoo de de lohri te teri jeeve jodi!

Bhaanvey ro te bhaanvey pit!

ELSS - Equity Linked Savings Scheme

This is the fourth post of the series and covers ELSS.

1. What is ELSS?

ELSS stands for Equity Linked Savings Scheme.

Unlike PF, PPF and FDs, ELSS invests money in equity market.

ELSS are almost same as Mutual Funds.

Dividend reinvestment option should be avoided as every time dividend is reinvested, dividend's lock in period starts from there.

Dividend payout option can be useful because dividend paid out is actually tax free.

SIP can be done for ELSS.

2. What is interest rate of ELSS?
As ELSS invests in Equity market, there is no guaranteed return. Return varies depending on Fund's performance and investment has risk.

3. What is the lock in Period?
Lock in period is 3 years.

4. How to get the money back?
After lock in period money can be refunded back to main account.

5. Is interest accrued on savings is Taxed?
Dividend paid out is tax free but other gains are taxed.

Further Reading:
List of ELSS Funds

Petrol Prices May be hiked by Rs 3

Govt is again planning to hike Petrol prices by Rs 3.
First food inflation and now increased Petrol prices, I feel sorry for all of us.

Banks has to normalize their service charges

Please read the full good news at:
http://business.rediff.com/report/2010/jan/11/rbi-bank-charges-may-be-capped.htm

FD - Fixed Deposit

This is the third post of the series and covers FD.

1. What is FD?

FD stands for Fixed Deposits.

Any FD of 5 years or more can be used as Tax Saving instrument.

It can be open in any Scheduled Bank. List of scheduled banks can be found at: ThankPlainInvest

If FD is in joint name, only primary holder of the policy can avail the tax exemption.

2. What is interest rate of FD?
Interest rate for FD varies from bank to bank.

3. What is the lock in Period?
Lock in period is 5 years.

4. How to get the money back?
After lock in period money can be refunded back to main account. Interest can be taken either quarterly or reinvested.

5. Is interest accrued on savings is Taxed?
Yes, interest accrued is Taxable.

Further Reading:
ThankPlainInvest
RaagVamdatt

SEBI: Market Wide Position Limits Across Exchanges

According to new measure of SEBI to streamline the operationalisation of Market Wide Position Limits (MWPL), it has issued following timelines for the last trading day:

By 6:30 PM - ISIN, Name, Interest and MWPL of the securites should be published on web.
By 7:00 PM - Permissible limits for the next day should also be published.
By 7:15 PM - Any discrepancy should be solved.

Know your Tax Refund Status

I have my Income Tax Refund pending from 2005-2006.
I was procarsinating on same and today gathered some energy to check my status online since I took an off due to sickness.

Well, I couldn't find my refund status, but found two great sources.

If you forgot your PAN number, fill in first name, surname and DOB on Get Your PAN and know it in seconds.

Also, one can check Tax Refund Status here, by providing PAN number.

Very useful links.

PPF - Public Provident Fund

This is the second post of the series and covers PPF.

1. What is PPF?

PPF stands for Public Provident Fund.

It is a voluntary form of saving. Any individual, even non-earning ones, can open PPF account in their name.

It can be open in any National Bank or some selected Post Offices.

There can be only one PPF account in name of any individual. Joint PPF accounts are not allowed.

The minimum amount that has to be deposited is Rs 500 and maximum can be Rs 70000.

Up to 12 transactions are permitted per financial year.

If deposits are not made in a PPF account in any financial year, the account will be treated as discontinued. The discontinued account can be activated by payment of the minimum deposit of Rs.500/- with default fee of Rs.50/- for each defaulted year.

2. What is interest rate of PPF?
Interest rate for PPF accounts is fixed by Central Government every year in March / April.

3. What is the lock in Period?
Lock in period is 15 years from the time first time this account has been opened.

4. How to get the money back?
Full amount can be withdrawn after the lock in period.
After lock in period, it can be operated for another 5 years.

5. Is interest accrued on savings is Taxed?
No income tax will be applicable on money withdrawn after completion of lock in period. So, in a way interest is not taxed.

Further Readings:
Rediff
TaxGuru

SEBI: Lot Sizes of FO standardized

SEBI has issued a directive to standardize the lot sizes of FO.

Click at this photograph to see the enlarged image.



Till now lots sizes were decided by Exchanges but now they are fixed. SEBI will review this every 6 months.

Impact, it will be easier to plan for FOs now. For exapmle, if I want to invest in FO of RIL, I know without checking for any exchange that it will be a lot of 250 (in price range 801-1600).

EPF - Employee Provident Fund

Starting from Today, there will be a series of post that will cover different Tax Saving Instruments covered under Sec 80C.

This is the first post of the series and covers EPF.

1. What is EPF?
EPF stands for Employees Provident Fund. It is a mandatory form of saving. Employee and the employer, both have to contribute to this fund. 12% is the minimum that needs to be added to it and employer has to match till this amount. It is of two types:

Provident Fund (PF) - This is the mandatory part of EPF. It is applicable to all the companies that have more then 20 employees. If you work in any of such companies, 12% of your basic pay will get automatically added to PF and employer has to match this amount.

Voluntary Provident Fund (VPF) - Any other contribution to PF over and above 12% mandated amount is considered as VPF. Company is not liable to match this amount. Maximum contribution allowed towards VPF is 100% of Basic + DA (Dearness Allowance).

2. What is interest rate of EPF?
Interest rate for PF accounts is fixed by Central Government every year in March / April.

3. What is the lock in Period?
Lock in period is till you get retired. In general, till you turn 55, your money will be locked in PF.

4. How to get the money back?
Full amount can be withdrawn in case of:

Retiring after attaining the age of 55.

Retiring on account of disability (permanent and total).

Migration from India.

In case of downsizing.

90% of it can be availed after attaining age of 54 or within one year before actual retirement, whichever is later.

Various loans can also be availed against PF.

When shifting the jobs, PF balance can be transferred.

5. Is interest accrued on savings is Taxed?
No income tax will be applicable on money withdrawn at the time of retirement. So, in a way interest is not taxed.

Further Readings:
BPOPioneers
RaagVamdatt

Growing Jewellery - Best of both the Worlds

Man, I couldn't resist posting about this.
I am not sure whether this is new concept or old one, but I came across it for the first time.
It combines two of my greatest weaknesses, jewellery and plants.
Yes, there exists something called Growing Jewellery.
It has tiny islandic moss plants sprouting in stainless steel bases.
Don't believe me, see some photos from Juliusson, creator of these marvelous pieces.





Please do visit Juliusson site.

List of Tax Saving Instruments

This is tax saving time. Time to use different instruments to save Tax Liabilities. Quick sheet to see various instruments available to save tax:

HRA

Staying on Rent - Claim HRA exemption

Deductions from Total Income

Medical Insurance Premium - Individual, Spouse and Children (Sec 80D)

Medical Treatment/Handicapped Dependent (Sec 80DD)

Interest on Educational Loan (Sec 80E)

Donation (Sec 80G)

Savings

Pension Fund

EPF

LIC Policy Premium

PPF (Public Provident Fund)

NSC (National Savings Certificate)

ELSS (Equity Linked Savings Scheme)

ULIP (Unit Linked Insurance Policy)

Fixed Deposit Schemes (5years or above)

NSC Interest

In case of housing loans

Loss from house property

PAN is mandatory for shares transfer

According to new guidelines of SEBI issued on Thursday, 7 Jan 2009, PAN number is mandatory in case of following transactions:

Transfer of shares to the heir (inheritor) in case deceased shareholder was the only owner of the shares.

Deletion of the deceased shareholder name in case shares were held jointly.

Spending Lessons for New Comers

Set Goals - If one does not know the destination, journey can be never ending and almost without any progress. So as the first step, set some goals for your self. You want to buy a car, a new laptop, want to get a house in two years, planning to get married in coming years. Good! Choose one or many goals and start saving towards them.

Setup Emergency Fund - This is required so that if some emergency comes, your whole financial plan is not derailed. Generally speaking, 3-6 months of in hand salary should be saved in bank account as emergency fund.

Save for Tax Rebates - Rs One Lakh of savings get you good tax rebate under section 80C. Take full advantage of these schemes.

Save for Future - Start investing in long term savings instrument systematically. Choose equity or gold or any other instrument that you are comfortable with.

Make Budget - Make a budget of monthly and annually expenses. Try to keep it within 50% of in hand salary and slowly try reducing it to 30%.

Track Expenses - Track your expenses so that you can know any leaks in spending money.

Avoid Credits - Try to avoid credit cards or any type of loans as much as possible. Set goals and save in cash for anything you want.

Have Fun - But have fun in process. It's OK to go over budget once in a while. If you will not enjoy your life, there is no point in saving it for future.

Happy Birthday babaji

Yesterday was Guru Gobind Singh Ji jayanti. I am a firm believer in Sikhism and hence it's one of the best festivals for me.


Find some of his phots from google images.

Happy Birthday babaji. :)

Value of time

One of the blogs of Life as a purse that I read today was talking about money versus time. It’s one of the finance topics very close to my heart.

I will always go for saving some time by outsourcing my chores. For example in real life, I have a house cleaning maid. I prefer paying them rather then doing these things on my own, simply because I know if I sleep that half hour in the morning I’ll be more productive rest of the day, which is worth way more then I am paying some one else.

In simple terms, this is how I perceive money-time relationship.

Time + Skill = Money

Time is a fixed part of this equation. Everybody on this earth have 24 hours to live. One has to include personal chores, social chores, money chores and skill improving chores all in this 24 hours. So, let’s use them most judiciously.

Next comes, Skill. If one will not work on improving their skills, it will be difficuthey will never be earning more money. So whenever it’s some chore that can be outsourced versus skill improving time, I personally prefer latter. Because I know more skill I’ll acquire, more market value in terms of money I’ll have.

That’s my simple equation. How about you? What’s your equation of time and money?

Summary of 2009 - Financial Aspects

2009 has been a year of lots of financial turmoil and achievements.

My 7 picks of this year are:
Recession: Most of the growing economies including Japan were in recession in 2009. All the economies were either not growing or were growing at much smaller pace.
Loss of jobs/ pay cuts: Lay offs and pay cuts were one of the most common words around. Almost all the countries and all the industries saw layoffs and pay cuts.
Sensex fall and smart recovery: Sensex's free fall began in 2008 and continued till March 2009. In March, after touching 8K levels, it recovered back to 17K in less then 9 months. Whew.
Mutual Funds trading: MF trading saw lots of refinement. Entry loads were completely removed and also now they can be traded on sensex.
Fringe Benefit Tax: This is one of the changes that directly impacts salaried class. FBT has been removed and now more of my package is taxable.
Gold prices are on continuous Upswing: I love buying gold but have not done this since one year. Gold is at all time high price and breaking new upward records every other day. Time to switch to artificial jewellery.
Falling Interest Rates: Same bank's same duration FD last year was returning 10% and this year only 7%. On the other hand, 2009 saw new home loans at 8%.
Direct Tax Code: DTC was proposed.

How I Spend first day of 2010

I welcomed 2010 by going to Agra with my family. We visited TajMahal on saturday morning after spending friday there as well.

Here, find some of the shots of this amazing monument.

Entry gate of Tajmahal from some distance, all foggy

Entry gate of Tajmahal

Tajmahal view as soon as we entered the complex

Who will not fall for this marvelous work

Last night's hangover ;)

side view, why i clicked this?

they can reside in this beautiful complex, me so so jealouse of them :(

2009 personal finance roundup

I never set any goals for 2009. But since we are in last week of 2009, I am trying to list how we (me and DH) fared financially in 2009.

1) We saved for my new car and bought it using down payment.
2) We are under budget in our yearly allocated expense amount by approximately 41K. This is not bad at all, given we faced so many unplanned home improvement projects in 2009.
3) We exhausted and exceeded my spending in 3 categories of my budget. Eating Out, Home and Gifts (No body gets any gift for guessing the third one).
4) We were able to reduce electricity bill of my house to two-third.
5) Fuel charges are also reduced significantly.
6) Though we are over-budget in Eating Out, we still reduced significantly compared to 2008. This is because this time I allocated half of what was allocated in 2008 and I am over-board by one Rs100.
7) I have curbed by shopping for clothes obsession significantly.
8) We have achieved our savings goal for the year.

How about you? How you all fared in 2010?

Goals Of 2010

New year is around the corner. Time to set new goals.

• Continue learning new dishes to cook. One new dish per week.
• Continue to be on budget.
• Start saving for prepayment of mortgage. 2L should be saved for same.
• Contribute to retirement as per the plan.
• Be less obsessive on daily tracking of things.
• Learn to swim.
• Improve healthy eating.

What will be your goals of 2010?