2010 Goals Tracking - March 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 March end and let's see how am I fairing in these goals.
Goal 1 - Cooking - PASS - Finally.
Goal 2 - Budget - PASS.
Goal 3 - Save for Mortgage - PASS.
Goal 4 - Save for Retirement - PASS - I never miss this, touch wood.
Goal 5 - Obsession for tracking - FAIL.
Goal 6 - Swimming - Don't Know - This can only be done in summers.
Goal 7 - Healthy Eating - PASS.
Goal 8 - Extra Earnings - PASS - Well ABN Amro Debit Card helped me achieve it this time.

Recap:
January Recap
February Recap

my car music system got broken

Today morning at around 6'O clock somebody rang my door bell.
Irritated to be woken up so early, i came to knew that someone has broken my new car's back window pane to steal my music system. :(

Things broken:

1) Window Pane
2) AC duct
3) Music system
4) Indicators were also not working in the morning.

How I feel, terrible. :(
My DH is now at service station to get the car repaired.
And I am waiting for the bill.

Unexpected expenses just pop up unexpectedly and in sad sad way.

Update

I was on vacation for a week to dharamsala.
Reason for all the silence and one junk post here. :)
will update you all soon.

Mortgage and its impact on one's money habits

House Loan has a big impact on one's lifestyle. This is what I have seen around me in so many couples and individual.

I have a friend who bought his house after 5 years of job. He always used to share his stories that he used to eat-out quite often when without a mortgage, but now after a mortgage he can't afford that much of eating out. I know of other manager who jokes that now because he has a mortgage, he can't buy that new shirt on this birthday. I know lots of people who postpone family planning because of huge mortgage.

Hearing to all these tales I always used to wonder why this happens. And now, when I have my own mortgage to deal with I precisely know what triggers all these changes:

If you are not paying mortgage, you have no financial burden of monthly payments. Yes you still might be paying rent, but rent's per month in Noida are 10K-15K where as EMI will be somewhere from 30K-35K. This obviously leaves you with the less money to spend hence the lifestyle changes become must.

Also, when you are paying mortgage, interest amount is very high. Most of the home-buyers pay almost same amount or more then original loan amount as interest to the lender. i.e. To say if you get a loan for Rs 30L, you might end up paying 70L-80L in whole. Once you understood it, you definitely want to save for loan prepayment.

trying........ to move on

When I was in sixth standard, I read in my science textbook a statement, which meant a definite one-mark question at that time. "Only those creatures survive who can adapt themselves to the environment". But never until I crossed my teens, I felt that it’s much more then that. I, as a human being, have done the same so many times in my life. When I attended college, I changed my dressing style, studying style, to suit better to the so-called new life of College. Then moving forward did same once again for my Post Graduation, first job, second job and so on.

May be I am generalizing, but I feel that in order to survive, we all do the same; change ourselves as per the new environment. In the process of survival, we meet many other humans. We tend to trust them and they tend to trust us. This mutual trust creates a bond between two humans that we conveniently name as Friendship.

But then humans are not perfect and so cannot be that bond. You tend to trust wrong people or its other way around. Few of them will behave in a way that you don’t expect them to behave in. You conveniently term them as wrong people! But if they were wrong, then how come you are hurt by what they have done! Reason being they were correct in their own survival circle, but probably it’s you who had wrong expectations from them!

So next time, if some one does a wrong to me, rather then trying to forgive them, I’ll try to forgive myself for expecting wrong from right people and hurting myself.

May be, this will improve my survival cycle. :)

My Childhood Frugality Obsession

I have a confession to make. I have been picked up by lots of people for my frugality. Not, it's just not my friends or an acquaintance, even my family some-times teases me for my frugality.

I still remember how when in my childhood days I'll not buy a candy for Rs 1 because I don't want to give away Rs 5. for this and get some change back. Till date when I go for window shopping, I take all big currency with me to avoid any kind of silly temptation.

I used to make notebooks from the papers that have one side blank, be it printouts, bills, envelopes, newspaper. This is something I do till date. My friends in college and some distant cousin used to call me cheapster to take out such papers from News Paper or from any other source for that matter. Yes, when I was a kid I was doing it primarily for saving my pocket money, but today I do it because I don't want to waste paper.

I used to wear hand-me-down clothes when in college and have been picked by my classmates more then once on not buying any new clothes even on birthday. I was absolutely OK with it because my sister is super-generous to hand-me-down very good quality clothes and besides I had tons of other things to do with my pocket money.

I never ever bought a pop-corn in theatre in my college days. No way could I afford it. Buying popcorn meant 1/10th of my pocket money. I rather will eat one burger in cafeteria to avoid even temptation. My friends never let this chance pass away to tell me how cheap I am.

If I'll list all other incidents off the head, this post will be the longest ever written. :)

How about you? Have you ever been teased for your frugal ideas?

Is gender biasing really true?

Yesterday I was watching "Mein aur Mrs. Khanna". If you have not watched it yet, don't waste your time by watching it. Very bad and predictable plot!

But it had an angle that got my brain to work. Lead pair, Salman Khan and Kareena Kapoor, is having tough time in their marriage because our hero is unemployed and his wife is working and supporting him and house. He makes her life miserable as a result of this, by not communicating his feelings and not doing anything relevant for her. He was purely selfish in that part of movie.

I know this very Indian mentality even today. Indian males can hardly accept it if their wives earn more then them. It's an acceptable norm that male should earn more then female in the relationship. Women's career runs on the whims and fancies of male. She has to make lots of compromises in her working life, sometimes willingly and sometimes unwillingly, like leaving job for raising babies, not taking promotions to avoid increase work load etc.

I am not against compromises. I am a woman and have done so and will do more in future as well, because they were never forced to me. What I find problematic is why Indian males still feel that they have right to have superior career and that women should always make compromises. Girls work equally hard to raise high in working life and have to work harder to maintain a balance in professional/personal life. But when it comes to male, no such balance exists. They take it for granted to behave in any way if their professional life is not going smooth. They will stop communicating when dealing with tight deadline at work, will leave all house hold chores when dealing with work pressure. Can women also afford to behave so immaturely?

Have you also noticed this gender biasing in Indian guys or am I really a feminist?

P.S. This is not from my personal experience. I am really blessed because my DH is more balanced then me. :)

Save for Yourself

Lot's of people buy lotteries in order to get rich quickly. Lotteries are so addictive that I remember how Delhi Government put a ban on it.

People who buy lottery tickets want to use small sum of the money to get rich quickly. Well I am not sure of what will be the odds to get rich that way, but I know one sure way which will give you some wealth in long run. It's called power of compounding.

Let's say a lottery tickets is for Rs. 100 and you buy lottery ticket every week. At the age of 20, if you start saving and investing this Rs. 100 in some recurring deposit or mutual funds or stocks, then over the long period of time it may yield much better secure returns.

For example of savings give 9% of return, then this savings will become Rs. 59430 in 30 years.

So, don't save to make others rich rather save with discipline to build wealth for you.

missing missing

I am having something called writer block.
Just not feeling right now to do anything because of all the confusion in my life.
Hopefully i'll be fine and back in 2-3 days.

I am not Impressed with this Frugal Tip

Yes, I do read lots of PF blogs. My GRS has approximately 50 of them. One thing that I have noticed is that many PF bloggers talk about same topics or tips at same time, and few of them don't even bother to link to the original post they got the idea from. May be I am being too sarcastic, it's just a co-incidence.

Recently I came across a tip on many many blogs, last one was at Times' Money. Tips that they claim to save money is to celebrate only special birthdays. Like 16th, 18th, 21st, and 30th and so on.

When first time I read about it (I should have saved it's link somewhere, darn it), it sounded so crazy but now after reading at some 3-4 places, I thought someone is really serious about it.

No way that I am ever going to do this. (I think now-a-days I have become too selective of frugal tips.) I will never do that. I seriously don't want to be an old lady in future who has lots of money in her bank but no memories, stories for her future generations. :)

I will rather always celebrate my birthday every year and have loads and loads of photographs of my aging process. :)

How about you? Will you skip celebrating a birthday to save some money?

How Healthy Is Your Budget?

Take FINANCIAL IQ TEST: How Healthy is your Budget? at WiseBread.

Find mine answers below.

Budget Maintenance / Awareness
I plan ahead for large expenses like repairs, appliances, or periodic bills. - Yes

I amortize annual expenses over 12 months for budgeting purposes (I apply the same principle to other periodic expenses too, for example quarterly expenses are amortized over 3 months). - No

I record all my expenses (or have an accurate record of expenses through bank statements or the like). - Yes

Before I created my budget, I monitored my expenses over a few months to figure out what I spend. - Yes

I review my budget regularly for effectiveness and modify as needed. - Yes

Savings
My savings plan is an expense that is part of my budget. - Yes

Extra money like pay raises, bonuses, and tax refunds go directly into savings or to pay off debt. - Yes

Gifts and charitable donations are part of my budget. - Yes

Flexibility
If I anticipate that I’ll go over the budget in one category, I find the money from another category that month. - Yes

I have financial padding built into my budget for flexibility (and sanity). - Yes

I have allowances in my budget for unexpected expenses. - Yes

Holiday season festivities and birthday gifts don’t throw me off budget. - Yes

Accountability
I know how much money I live on each month/year. - Yes

I balance my chequebook so I don’t go into overdraft. - Yes

I can account for all my spending. - Yes

I live within my means. - Yes

I don’t charge anything to my credit card unless I can pay it off in full by the due date. - Yes(No Credit Cards)

I pay all my bills on time. - Yes

My income is larger than my expenses. - Yes

Budget Lifestyle
I don’t allow myself to feel pressured by peers to spend money that I don’t have. - Yes

I don’t buy caviar (for example) unless it’s in the budget – even if it is on sale for half price. - No

I view my budget as a way to figure out what I CAN afford, instead of what I CAN’T. - Yes

I have a positive goal or vision to keep in mind (like being debt-free, or having a vacation) for times when the budget is tight or I start to feel deprived. - Yes

I budget for small rewards to keep me on track and motivated. - Yes

Everybody in the family participates in the budgeting process. - No

I had few NO's but still I scored well, how about you?

Frugality is In

I am tracking my everyday expenditure since 2003; I know this is not news for few of you. In all these years, I used to share my little know-how of budgeting and tracking with my friends, but never until last year anyone esteemed or discussed this with me. All I used to hear from them were downbeat things about tracking and budgeting. "Is it worth to waste that much time on these things?" was one of the most common comments. I hardly got any affirmation on my frugal ideas.

Not anymore. In last 3 months, 4 of my colleagues and friends have sought my support because all of the sudden they have realized that they have so little nest egg, so less assets, and how their expenses are sky rocketing in this uncertain economy. I have helped them by encouraging them to read more about personal finance, by sending them my favorite links about this topic, by helping them come up with their tracking spreadsheets. All of them came back to me after one month sharing that they never knew they spent so much monthly, an eye opener for them.

Now they don't pass any opportunity to share their new frugal idea with whole group and most of the times when they ask me how I found it, I reply that its brilliant idea and it works because I am actually following it from last XXX years.

No, I am not claiming that I am a personal finance expert or anything like that. I still consider myself novice in the field and try to learn about new things. All I want to say that frugality, cutting down cost, saving money; this all has been new craze around me. I never saw people being so enthusiastic about penny-pinching. In fact few of my colleagues have transformed from "I don't like discussing money, it's just so cheap" to "you know I changed my phone from post-paid to pre-paid and it saved me XXX Rs."

My concern here is how long this new craze will last. Will this new bragging ever stop? Or should I get accustomed to this?

How about you? Have you seen similar change around you or are you one of them who changed their habits to frugal recently?

Savings across the generations

Savings patterns have changed tremendously over a period of time. I still hear stories from my older generation how they started saving and investing as soon as they started jobs, a pattern that I find missing in today's generation, including me.

One senior member of my family proudly preaches how he bought his first investment, a small shop, within 2 years of his job. And over the period of time when he retired, he owned four residential and commercial properties.

I have also heard numerous stories from one other family member that how they managed to build two houses and educate and marry all of their three kids in single-income family.

Of course both of them will accept it that while they were fulfilling their duties and building wealth, they never owned fancy things. Cars used to be rare commodity at that time. Kids were not studying in fancier schools. Family members were not wearing fancy most clothes and no they might not take a vacation every year. Theirs attitude is what I’ll say "Saving's First" attitude.

Cut to generation X. As soon as we get the job, we want to buy a new car. By the time car loan is half paid, lucky one's will get married. After marriage comes luxurious travelling for next few years. After two-three years, planning for future starts, which includes owning a house and having a family. Now if one starts working at the age of 24, it's at age of 29-30 when one is thinking of buying a house. That home loan might take 5-10 years for repayment or even more depending on how diligently you want to finish it ASAP. By that time you are near or in your Forties. At that point, concerns for retirement and kid’s future may arise. This is the stage in financial life where I have personally seen most of people regretting. I still remember when my manager who was in her early forties once commented to me that "You are quite wise and smart to start investing when I am still in my mid-twenties. I used to splurge all my money on eating-out when I was your age." This attitude is what I'll say "Spending's First" attitude.

I am not trying to advocate any kind of lifestyle here. I am absolutely OK with both kinds of lifestyles. But I have a suggestion to all the youths who are starting on their careers. Having a decent lifestyle is absolutely acceptable. Go and buy a car, buy a new Cell Phone and new PS3. But try to save some portion of your salary every month. Saving 10% of your salary will not hurt your lifestyle much, but can save you a heart attack in your forties.

What about you? What kind of lifestyle do you have? "Saving's first" or "Spending's First" attitude?

I am so so confused :(

I am confused :(

Ok, here is the story, this time mine, not a fiction one as in here.

I am not happy in my current job. I am working at this place for almost five years now; to be precise I will be completing 5 years in this August. I have got bad hike from last two years, not because I didn't performed, but because of low dollar cost one year, and recession the other year. Even this year picture is very gloomy. The division where I used to work, the work that I used to love, has been sold off last year. Almost all of us had been absorbed somewhere else in my company, I must confess a very genuine effort on their part, and they could have given us pink slip. I got moved in last mid-November. I do not like my new work. I hate it so so much. Everyday when I get up in the morning I feel like bunking my office. :(

Sad story, right? I made up my mind that I had to do something about all this. I started giving interviews and now I got an offer. This is second offer that I had got this time around. First one was almost OK other then they were calling me for almost same salary I am getting now. I refused without a blink.

Now, today I got another offer. They are again offering me almost same salary plus involve relocation. They are, yes, offering me a promotion, something that I don't see anywhere in my near future in my current company. They have the work that I want to do, I hope so.

Lots of things point out that this offer is bad and I should reject it too, but some part of me says that I should take it. Situation is something like, here it’s sure bad and there it's possible to be bad. :(

I am not sure what shall I do? I think I need to weigh in lots of things and do lots of calculation and brainstorming before I can come to some conclusion. Oh GOD, please guide me. Please.

I can't promise you that I'll do what you will suggest, but if you understand my dilemmas please feel free to drop some lines, to motivate me, to guide me, something.

Tracking every penny spend

One of my best friends recently asked me why I am so obsessed about tracking. Yes I can actually tell how much I spent on tea when I was in my college and so on.

I do this because seeing my tracking equips me with the knowledge of my exact financial status. This in turn leads to good money habits and power to take informed financial decisions in my life. After I got married I took the responsibility of managing our joint finances. My disciplined money habits helped us in surviving a pay cut of my DH, critical illness of my MIL, setting up a new home, buying new car, all in two years of our marriage.

We would never have survived financially if I had debt or not had savings to survive in these testing times. I used my good money habits to take care of my family during tough economy.

My suggestion to all of my blogging friends, "start tracking!". It will be a record book of all your wise money decisions and not-so-good money decisions. It will teach you a lot about your spending habits, and will also serve as motivator and teacher in future.

relationships or charity talks??

"This is the greatest mistake that people do when they meet love...they try to posses it, they demand, they expect... and just like the water spilling out of your hand, love will retrieve from you"

These are the lines from one of the fwded mails fwded to me by one of the good friends.
It was some article by Swami Vivekananda.

Actually I am writing this because I didn't agree with these words.

What I believe in is if you do something for someone and don't expect anything in return then its not a relationship, but thats called a charity. Relationship is a two way function and according to me relationship is as strong as you expect both parties to participate in it. If there are no expectations, there is no possesiveness, then is it truly any relationship! Well, I doubt.

Be it any relationship, there is always a selfish angle to it. A mother loves her child and expects her children to love her and respect her back. Friends love you because they expect you to accept them. Spouse or romantic parter probably expect emotional security.

If there is no expectation back, belive me that thing is junk in your life. There is a rule that says until all your basic needs are not fulfilled, you can't do charity. And i think the rule applies in relationships too.

But I will say, expect and give alot in any relationship. Thats what gives the strength to the relationship. Leave charity for later half of your life

Are you Frugal or Miser?

I am a frugal person and kind of proud of it too. But one thing I know for sure is that I am not a miser.

I never compromise on a thing which matters to me. For example, if I or my loved ones need medical help I'll really never compromise on good doctors for cost. I only wear flat sandals and can't bear heels. I never ever compromise and buy a cheap sandal and compromise on comfort of my feet. I love pampering my near-dear ones with best gifts I can find. Cost doesn't come in picture.

I know that I am blessed enough to be in position to do all said above. Yes I don't have unlimited money to splurge on every thing, but it doesn't mean that I am struggling with my everyday needs too. By almighty's grace I am lucky enough to have food, clothes and house. I know that I love to splurge on nice clothes, hence I cut corner at places which doesn't matter to me.

I think that's the whole essence of being frugal. You should save money on things that doesn't matter to you. Do deals comparison; do price matching, compromise on quality for cost at places that doesn't matter. And you should splurge on things and places which are utmost important to you.

Rather, if you are always saving money, all decisions are only dictated by saving money, then you are not frugal, you are MISER. You being frugal don’t mean that you should make your partner's or family member's life miserable too.You want to save money doesn't mean that your wife should not buy few new clothes.

I never ever want to be a miser and then regret when I am old that I have all the money but diabetes, bad body, heart problem, and hence now I can't splurge on food or clothes. I like to enjoy my life today, in moderation, save for tomorrow in moderation. Extreme frugality is also not good my friend.

What about you? Are you a spender, frugal person or a miser?

Happy HOLI - 2010

I wish I could share my personal photos of the holi but that might be a danger to my anonymity.
So, from the net, here are few of the photographs that I liked and well captures the spirit of HOLI.

Tax Related changes of 2010

New Income Tax Slab:
Income up to Rs 1.6 lakh - nil
Income above Rs 1.6 lakh and up to Rs 5 lakh - 10 per cent
Income above Rs 5 lakh and up to Rs 8 lakh - 20 per cent
Income above Rs 8 lakh - 30 per cent.

Additional deduction of Rs 20,000 allowed on long term infrastructure bonds for income tax payers; this is above Rs one lakh on saving instruments allowed already.

To Check how much Tax you are actually going to save with this new Slab, head to:
Indian's Investor Page.