Let me start this post by wishing you a very happy new year. I wish you will flourish with good health and wealth in the new year. While keeping good health is entirely in your hands by taking balanced diet, regular exercise and keeping healthy lifestyle, to keep good wealth you might need some tips/suggestions/guidelines/tools. I am here presenting one such tool which will help you keep a track on your personal finance, expenses etc. which is undoubtedly should be the first step towards building wealth.

First of all, download this per-formatted spreadsheet from here. Due to its large size, I have compressed it with zip and you need to unzip it first before start using.

This pre-formatted spreadsheet which you can open and use in Microsoft Excel and in other software which can read .xls file such as OpenOffice is very easy to use and can be updated/managed by non-technical person with little training. This is actually the whole idea here because most of expenses in majority of households are carried out by members (wife, mother, father etc.) who may not be that tech savvy to use complex software/apps/sites etc.

I am using this spreadsheet since 3 years now and very satisfied. I have now complete control over my expenses and exactly knows from where my money comes in and where it goes.

The basic idea while using this sheet is the use of labels. For example, you will first put your estimated budget for each of category/label and then make daily entries as and when expenses occurs in ‘daily entry’ section mentioning the label associated with that category. So if you paid your house rent and for this the label is ‘h’ then put ‘h’ in label cell while making an entry. This way the sheet will keep track of all expenses for which entry has been made and do necessary calculations automatically.

If you are an existing user of this spreadsheet, you can see that I have done some major improvements, added some functionality and 2 new sheets. But if you are new user, you may want to go through earlier article as well where I have put basic information in more elaborate way  here.  For existing and new users, let me put some information about additional functionality I have added in this latest spreadsheet:

* Track credit card payments/bills : While making an entry, if you paid the amount by credit card, put a ‘cc’ in small cell between amount and comments cells. This is to keep track of payments made by credit cards. Check the example below:

Here, let’s say we paid house rent with cash but for movie tickets and broadband bill we used our credit card, hence, we have to put cc (denotes payment using credit card) in cell before comments cell. This is necessary to keep track on all such payments. After such entries you can see total amount paid using credit cards in credit card payments/expenses section in the sheet, like below:

Now you can see that Rs. 2500 in this month has been paid by credit card. Let’s assume this is for Jan. 2012 and we are just started using this sheet so there’s no previous bill displayed in CC Bill Due and Budget with CC due. In case you remember your credit card usage of Dec. 2011 then you can manually put the figure in cell which is next to ‘CC Bill Due’ and total budget will be displayed with credit card dues. For this month, Jan. 2012, we have paid Rs. 2500 through our card for which we will receive the bill (of credit card) in next month. Obviously, this is the liability which we have to pay next month (in this case Feb. 2012). So if you go to Feb. sheet, you can see that Jan. 2012′s payments are displayed in it, like below:

Here in Feb. sheet you can see that Rs. 2500 is payable this month as credit card due for which transactions happened previous month.

* Additional Sheets : Apart from individual sheets for all months of 2012 and one sheet for annual view, I have created 2 new additional sheets to put extra information pertaining to your personal finance in them. one sheet is ‘investments’ where you can keep track of investments like insurnace, MF, Stocks etc. and another sheet is ‘passiveIncome’ which will help you to keep track of ‘extra’ incomes like rentals, interests (FD/RD), dividends etc.

* Updates in Income/Savings section: In these sections, I have introduced separate two character labels which you should use to put an entry. For example, check these entries:

On 3rd Jan. you got salary of Rs. 23000 and also got interest of Rs. 400 from your FD in Bank. These are incomes, so you put ‘in’ (denotes INcome) for salary and ‘fr’ (income from FD/RD) for interest entry. These labels are there in Income section to keep tracking of all incoming money. Also on same day, you paid Rs. 2000 towards your monthly SIP in mutual fund, this is saving and you put ‘mf’ (saving in Mutual Fund) label for it which is there in Savings section. Therefore, when any such thing happens like your receive money or put your money for investment/savings etc. don’t forget to make an entry to keep a track.

You can see amounts below in Income/Savings section after making entries as displayed in earlier image:

Here you can see, Total income for this month up to now is Rs. 23400 (income from salary Rs. 23000, income from FD interest Rs. 400). Below this, in savings section you can see your total savings as of now is Rs. 2000 which you paid towards mutual fund SIP. You can see that if you subtract total expenses occurred (as you can see in daily entries, your expenses are at Rs. 11000 due to payment of house rent, movie tickets, bill payment)  from total income (Rs. 23400 from salary and interest), you will get Rs. 14900 which is being displayed in ‘Saving a/c’ cell (A25). Your saving target is 50% (A40 cell) of your income, that means Rs. 11500 (A42 cell) from which you have done saving of Rs. 2000 already which means 17.39% (A44 cell) of your target.

I hope you most of the information, you will become comfortable once you start using it. So start using it and also share it with friends. Anyhow in case there’s any confusion/query/suggestion, don’t hesitate to put a comment below or mail me at hello AT jagbir DOT com.

For many people, managing money is more difficult than earning. While we are sure from where its coming, many a times we have no clues where its going. The solution is to track your income and expenses, but implementing it practically is not so easy. It is sometimes complex, many a times a burden and all the time a boring ritual needs to be done daily.

I tried few software but found them complex/tedious, then came some websites but they vanished if I am not connected and I can not remain connected at all the time. Putting in a simple text file or writing on notepad can continue up to the time that you no longer recognize or understand random numbers written everywhere in notepad or simple file.

One solution I found which is working pretty well since 2 years is that I took blank spreadsheet in Excel and formatted it so we just need to put daily transactions/values in it and it should show in easy and nice way. A non-technical person should be able to use it with ease, is the primary requirement. My wife usually making entries in it and much satisfied. Its a daily 2 minute work.

Download the spreadsheet from here. [Updated link to new latest spreadsheet for 2012-13]

I’ve edited it to start from Jan. 2012-Dec. 2012.

It may look bit complex initially if you are not aware about Microsoft Excel.

Update as on Dec. 2011: Posted new article having latest spreadsheet, please check it here.

* Investorshine.com is not for profit site with an aim to spread personal finance literacy and enable ordinary people to make better finance decisions. You won’t find any advertisements or endorsement about any products on this site. Please spread the words by sharing it on facebook/twitter etc.

Other related articles you may like:

* Pre-formatted spreadsheet to track personal finance, expenses for 2012
* Banks are not so good and safe as you think for your money.
* Providing fake house rent can cost your job.

Managing money is more difficult than earning it. Majority of the Indians park their money in Banks for investment purposes. Only 3% invest in stock market which is one of best compounders of money. Though I know few friends who tried investing without knowing what they were doing in stocks and burnt their fingers, they now swear that their money will never head towards stocks. Phew!!

Everyone thinks that Banks are the best instrument for parking their wealth and trustworthy. No arguments! But certainly there’s something which you may not know about banks. Here are 3 reasons stating banks are not as good as you think.

Reason 1. Limited Guarantee for your Money:
What will happen if the bank where you have account goes bust? Well, govt will pay your money back, no matter what happens to the bank? Nope. Want to highlight that on liquidation (selling defaulter bank property to repay depositor’s money), every depositor is entitled to repayment of his/her deposits up to a monetary ceiling of Rs. 1,00,000/- (Rupees One lakh only) from the Deposit Insurance and Credit Guarantee Corporation (DICGC) under usual terms and conditions. So, if you have 5 Lacs in your bank account, only 1 lac will be returned. No assurance, no guarantee, no commitment for the remaining amount. If you think, banks can’t go bust…read on.

Reason 2. Frauds are in banks as well
Frauds are in every industry and banking is not an exception. There are many instances where banks were found to be malfunctioning, conducting frauds and their licenses got canceled by RBI. Few instances are listed below:

* The Reserve Bank of India has canceled the license of National Co-operative Bank (NCB) operating in Kurnool District citing the latter’s chronic defaults to the depositors and its failure to file statutory returns with the central bank. The order canceling the license was delivered after the close of business on April 7, 2010. Source.

* Parmatma Ek Sewak Nagrik Sahakari Bank Ltd., Nagpur, Maharashtra went bust on april 27, 2010.

* Pune-based Ajit Sahakari Bank Ltd breathed lasts on Jan. 28, 2010.

* Four cooperative banks found guilty of involvement in scams: Madhavpura Mercantile Cooperative Bank (MMCB), Krushi Cooperative Urban Bank (KCUB), Charminar Cooperative Urban Bank (CCUB) and Nagpur District Central Cooperative Bank (NDCCB) in 2001-02.

Ok, you are assured because you haven’t heard about these banks and also don’t trust such tiny unknown banks for your money. Big banks are not an exception again. Did you heard about Global Trust Bank? It’s one of the large private sector banks cornering crores of people’s money declared dead in 2001 due to involvement in stock scam. Later it got merged with OBC.

Next, you can think that PSU banks are the safest? May be right but not the best! Remember no guarantee for your entire money whether it’s in a private or a public bank. And why banks are not the best, read on…

3. Very low Returns
Suppose you give me Rs. 100 today and I will return Rs. 80 to you next year. What will you think and do? You will smile at me and say thanks. Correct? Why not? It’s what you are doing with Banks. They are giving you petty interest of 3.5% on savings and around 5-6% on FDs (for 1 year). Consider inflation at 10% and you are getting negative return on your investments. Even if inflation is 8%, you will get -2% return on your FDs for a year in general

Conclusion
Well, my intention here is not to prove that Banks are not safe or good but that some kind of risk is everywhere. We are working hard to earn money and money should also work hard for us! Keeping it idle at banks will do no good to you except for giving you a sense of security.

A better way is that instead of investing money in saving or FD, why don’t you purchase the share of that bank as well? It’s an irony that when we put money in saving, the bank is super safe but when we buy its share, we think it can bust the next day. I’m not advocating for private banks, you can purchase shares of PSU banks and forget them for some ‘fixed’ time like 3 years, thinking that you have a super FD

As an example, if you opened one FD in State Bank of India on May, 2007 for 3 years, you got around 7% appreciation of your money, while on the other hand, if you purchased shares of State Bank of India on May, 2007 (share price Rs. 1200), you will get around 90% appreciation of your money now as price in May, 2010 was around Rs. 2250/-.

Another example, if someone invested in a Bank of India fixed deposit account in 2001 they would have an 8 percent simple return per year. If the same person invested in Bank of India stock he or she would have a total return of 3,300 percent as the stock rose from 12 rupees to 410 rupees.

Of course, we must be extra cautious before investing in stocks as higher risk is there, so due analysis is recommended and remember, the biggest risk in life is not taking a risk. So, prepare well and at a minimum level at least starting investing in Mutual Funds if not in direct stocks. Let me know, what are your thoughts about such an approach.

This is a common practice to produce fake house rent receipts to claim higher tax relief on HRA. Many people I know, do this year after year. They purchase ready made rent slip booklets from market, fill up the details and one of the friends signs there on receipts after pasting revenue stamps ,etc, if required. Then these receipts get submitted to company.
It’s also required to submit copy of rental agreement if rent per month is above Rs. (where is my rupee symbol?) 10,000/-. Ah, no big deal, take your rent agreement, scan it and open Photoshop or even MS-Paint if you are keen ☺, change the rental amount to whatever you want and take a print-out of the modified version.
I didn’t hear until recently that anyone gets punished due to such activities but a recent verdict by High Court clearly implies that if the employer finds any discrepancies, then he can sack you. Source
Another practice people employ is to submit fake LTA bills. “The trick is very easy. Book train tickets online from IRCTC, take their printouts and then cancel those tickets. After some time, submit these tickets to claim your LTA”, said a friend working in one of the Top Indian IT company. He has been doing this since years. The safeguard here is that railway recycles PNR number after some time, so almost no way to trace whether you actually traveled on these tickets or not.
Well, I want to say just one thing, how corrupt the Govt. is, it’s still run on our money only. Country is changing may be on slow pace but changes are there. Whatever didn’t happen in the past may happen in future. Now a days almost every transaction gets attached with your PAN number, why take risk for petty amounts? So don’t do such malpractices and always vote in elections, if you think you are doing wrong due to bad politics, corruption and all. Remember, someone very well said, “Bad politicians are elected by good citizens who do not vote.”