Indian Thoughts

My money is mine so are decisions associated with it.. period

noreply@blogger.com (Ideas to Simplify and Manage Your Finances.) — Wed, 11 Jan 2012 07:57:00 +0000

Sometimes you come across a post that exactly describes your state of mind at that time. From last few days I am frustrated. In general I am way more irritable then normal me. I am trying to introspect and understand what's bothering beneath the surface but it is not an easy task.

Well I know for sure last year has a big role in that. As I have mentioned several times here already it was a year of murphy. I read an article by J.Money about stuff new home owners should think and it struck an immediate chord. There was probably not a single month where I didn't need to replace or buy something new for home.

I know, that's why we save emergency fund (my EF also includes my contingency fund). But I am a saver. I always like to save first and then spend. So, it was tough for me. Very very tough to part with so much of our saved money month after month. It's very hard to see your 18 months of EF depleting to 11 months EF.

On top of that what else can frustrate you. Don't waste brain guessing, its when people comment that when you have so much money (in bank) why you crib about expenses and why you do price comparing, why to delay some purchase, why not to keep full time maid? Why why why? That's something similar to what FB wrote recently in her article that how people think others get rich.

Let me just dribble my answers here, for my peace of mind sake:

1) I have money in bank because I am thoughtful about expenses which you are not.

2) I understand that 100 Rs. wasted each day costs me Rs 3000 in a month and in a year, Rs 3000 * 12 (Go do the math), that’s a very respectable sum FOR ME.

3) I have money because I work my a$$ for it. Even in pregnancy when sitting for long hours was next to impossible I worked as much as I could, because I understand that money needs to be earned.

4) I simply didn't inherit anything in this world. From my house to my car to everything I own, I have earned by working HARD.

5) I do price comparison because I understand that every penny saved is equal to 2 pennies earned.

6) Because I want to retire one day without being dependent on my children.

Frugality is tough especially when you come across such people. This blog and my Google Reader provide me with much needed motivation and peace of mind at such times. Thanks to you all PF blogger out there. You all rock.

Goals for 2012

noreply@blogger.com (Ideas to Simplify and Manage Your Finances.) — Wed, 04 Jan 2012 12:13:00 +0000

After taking unplanned break from forming goals for 2011, I am back. I am again trying to work on lots of issues at one time. It will be a big daunting failure if I will not decide on some (???) goals for 2012. I did OK in 2010 thanks to this blog. Hope to ATLEAST achieve that much and I will be one happy gal.

So here go my goals for 2012:

Health:
1) I have a new responsibility in my life. So it’s high time for me to be responsible for my health. I gained quite a lot of weight while pregnant (:)) and lost most of it but not all. I would like to go back to my pre-preg day’s weight. Ideally I would like to achieve this by the time my baby is 1 year. But, even if I achieve it by EOY (end of year), it will work. This will do lot of good to me financially, that might enable me to fit in my pre-preg days clothes.

Financial
My financial life is at lowest point ever. In 2011 I was not able to save even 5% of our in hand salary where this household is used to save close to 30% of its in hand. :( Plus me not working for first quarter in this year is also going to be a big strain on my finances. So my financial goals are going to be more challenging than first one.

1) I want to bring our mortgage to such an extent where my house can service itself. To achieve this by EOY, I need to bring in close to 8L money. This is going to be tough.

2) Maintain my EF as 3 months of expenses once I join back my job.

3) If I can save for retirement as much as I did in 2010, that will be a good punch to future expenses.

Personal
I wish I could become a SUPERMOM. :)
But Santa (on Christmas) and Lakshmiji (on Diwali), both of them told me that no wishes for you for this year. :( So, let’s formulate some goals in that case:

1) I am a late sleeper. What I mean by that is I sleep by 2:00 at night and love to get up at 10:00 in morning (I wish I could tell you the truth that 10:00 is actually 12 :)) But once you have a baby and you plan to join your job and you also decide that you will cook morning meal plus lunch yourself, this won't work right? So have to start the habit of getting up at 6:00 in the morning. Only if I would have thought of this while in school, I would have been favourite of all my teachers. :(. But it’s never too late, is it?

2) I think one of the most vague yet most important goals is to maintain a WORK-LIFE balance once I join back my job. This is going to be tough as there will be lots of unknown (to me) hurdles all along the way, but I will need your blessings and I sure can do it. If I can't, then I can always quit my job again (of course first I have to join again) and live this ideal life of being at home all day with my baby. :)

So 6 goals in all, what do you think will I be able to surprise myself by achieving at least few of them?

Are you also crazy enough to form goals in New Year?

Cost of bringing baby on this earth.. Happy New Year

noreply@blogger.com (Ideas to Simplify and Manage Your Finances.) — Wed, 04 Jan 2012 11:14:00 +0000

Happy New Year everyone. And thanks for not reminding me that I am 4 days late. :)
Well, I wouldn't have been 4 days late if Manshu from OneMint would have posted his article 4 days earlier which prompted me to write a comment which, I thought, can be used as a post on my blog as well.

His one of the reader wanted to know about baby related costs.
No I am not going to write about future planning etc. because that is something I am still figuring out. Rather, I am going to talk about costs of bringing baby on this earth. And by cost I mean financial cost. :)

So here is the response I left on Manshu's article, reproduced verbatim, only with spelling corrections done. I hope Manshu will not mind. :)

....

Well this is something I was thinking to write on my own neglected blog from some time. But I guess writing to you here is a much better option (can’t I go to Jupiter for some time. It has 72 hrs. a day)

Well I think I will list following things as necessary:

1) Have your EF in place, pregnancy can have lots of unexpected complications which will lead to lots of tests, implication lots of money spend. Hardly any medical insurance covers costs of these tests. In my case, this cost was approx. 10K every month.

2) Increased grocery bills. You will be eating and definitely wanting to eat better food. More fruits, less junk etc. Approx. cost, 5-10 K every month.

3) All the medical insurances, almost, cover maternity hospital charges up to 50 K. Have another 50-60 K ready in your EF as your bill might go over 50 K if you are going for private hospital. Sometimes, your chosen facility may not be cashless in your insurance. In that case you have to first pay hospital which will then get reimbursed.

4) If a girl is working, she will get approx. 3 months of paid maternity, in India. After that if you wish to take more time to spend with your blessing, you have to take loss of pay. So, do consider that in your financial planning.

5) Your baby vaccinations will cost you around 7K in first 4 months. Rest I will let you know once I incur. Also there will be other Dr visits and I am not aware of any medical insurance which covers all this.

6) If one has premature delivery then babies may need to be put in Nursery, consider its cost as well. I don't have exact idea as fortunately I didn't need it, but I estimated it to close to 1L at my time.

7) If you are living in a single family, then once you want to join back after having baby, you have to consider cost of making arrangements for your baby care. It can be day care or some aaya, again cost have to be considered.

8) Your small one will need clothes, nappies (or diapers if your choose that), cosmetics etc. Here I will suggest not buying lots of stuff as babies grow FAST. And keep in mind baby stuff is EXPENSIVE. There will be other baby stuff required depending on choices you will make, like baby cot etc.

9) Once baby will be close to 5M, you might need other gears, like stroller, walker etc.

10) And if you still are left with some money, you can plan to buy more than basic things for you. I mean more than required maternity clothes. Well I couldn't :(

And then yes, Hemant's article is good for planning baby's future. But you also have to consider cost of bringing baby on this earth.

My one last piece of advice:

Babies are adorable and so is their stuff. You will want to buy anything and everything on this earth for your baby once you step in those baby shops. So be very very rational and ask yourself lots of time if you will actually need it. And don't try to buy everything in one go. Initially only buy what’s most important and as your baby will grow you will automatically know what is needed.

My Blessing - that kept me away from here

noreply@blogger.com (Ideas to Simplify and Manage Your Finances.) — Sat, 08 Oct 2011 12:57:00 +0000

This is one of the reasons that kept me away from my blog from so long and probably will not let me being regular even in future. :)

Yes, I delivered a baby this August.

Are you buying gold on this Diwali

noreply@blogger.com (Ideas to Simplify and Manage Your Finances.) — Sat, 08 Oct 2011 11:44:00 +0000

Though I am missing from writing circuit from long time, but I always keep my reader well read.

The latest trend I see in PF circuit is to write about Gold. Everyone wants to predict whether Gold's Bull Run will continue or not or pros and cons of investing in Gold or how to invest in gold. This list can go on for quite long.

This advertisement provoked me to write about Gold.

Well that’s exactly my kind of strategy to buy gold. No matter how frugal you are, there will always be some occasion where you would like to buy something to make that moment memorable. For example, we Indians like to buy something on Diwali for home, buy something when a baby is born. So rather than buying something consumable, how about buying something precious like Gold or Silver?

Consumables will be of no value after you pay for them, but gold and silver is something that retains its value. No I don't want to predict or calculate whether it will beat inflation or not. I also don't support investing in Gold for retirement because of lack of liquidity. But how about buying Gold as mementos that you will do anyhow.

And we Indians know how much we love to wear that special earrings or bangle of our grandmother.:)

Life is not fair but you need to fight fairly

noreply@blogger.com (Ideas to Simplify and Manage Your Finances.) — Thu, 28 Apr 2011 06:29:00 +0000

It’s easy to complain. It’s very easy to think that you are facing the biggest problems of life. But the fact is that I have never come across a single person in life who has no problem at all.

2011 has been a rough year, very rough year indeed. Not so much financially but emotionally and mentally. This has been a year of Murphy visits. I thanked Murphy for not visiting me throughout 2010 and I think that hurt his pride. He decided to be with me for a long time to come now. Between so many hospitals visits and all the bad NEWS from everywhere (and yes sprinkled with some good NEWS at times too), I started believing that I am having the toughest time anyone can ever have.

But then, I come across a guest post on Budgets are Sexy, one of my favorite blogs, by Ashley. To be very honest, I do read lots of posts but very rarely a post will compel me to read all the comments as well. It was one of those rare posts. Yes she is a very strong woman to go through such tough times when she was pregnant and I hope and pray that she never ever face any such problem again in life.

After reading what she went through, I felt blessed after long long time. I am so thankful that I always have food on table, that too of my own choice. I have clothes and well needed resting time as well. I can afford to leave my job for some time if situation demands it. I have money in bank so that even though I am away from family, I can or they can visit me, if health permits.

I am so thankful for her and J Money to host this post, because it gave me much needed motivation and hope to fight my current circumstances with more optimism. Thanks so much.

2010 Goals Tracking - Year End

noreply@blogger.com (Ideas to Simplify and Manage Your Finances.) — Thu, 09 Dec 2010 05:31:00 +0000

A caution, this is really a long post.
We are in last month of the year. I am already thinking about things I want to achieve in next year. This year for the first time I am finding it difficult to find the goals, because from last 4-5 years my goals always revolved around money and I kind of do very well in that department without much of the effort. Hence, while setting last year's goal, I actually for the first time added some non-PF goals in my life.

This revealed one of my big weaknesses to me, something that I can exploit to improve me. I so much hate writing fail for any of the goal that I consciously started working on those things that I used to hate at one time. And I know this is a PF blog and I generally don't write about personal experiences here other than one’s related to money, but I think that my goals for next year will hardly be PF dominated.

Now I look at goal setting as the technique to improve those areas in my life that I really want to improve. So in my year end review, I want to visit not only how many pass vs. fail but also what was hidden motivation behind all my goals.

These are my goals for 2010:
1) Continue learning new dishes to cook. One new dish per week.
Result: 7 Pass vs. 5 Fail
I used to hate cooking. When I got married some 3 years back, I couldn't even prepare a decent tea. I am lucky enough that my in-laws and my husband in particular are OK with it. In NOIDA we had a cook since beginning and my husband will happily prepare breakfast and tea for me (and I am a tea addict).

What got to me to want to change it? LOVE. Yes honestly, I love my hubby and he loves food. He is a big big foodie. After 2 years of my marriage, I started getting those feelings that I want to cook for him, I want him to say good things about my food and so on. In fact, I tried doing this even in second year of marriage, but resolution never lasted more than 2 weeks.

Setting this goal helped me improve my cooking. And after moving to Hyderabad I realized that it’s very difficult to get a decent cook of our taste here. Now I cook dinner everyday which is a big achievement for a person like me.

2) Continue to be on budget.
Result: 8 Pass vs. 4 Fail
What can I say more than the fact that I love budget and personal finance else why will I have this blog. Plus I like to see my savings grow rather than expenses grow. I started with a set budget to spend per month and exceeded it by 10K as per the need (see I am flexible and not at all that rigid or was it like I hated idea of writing fail over here). But I stayed in budget for most part of the year.

3) Start saving for prepayment of mortgage. 2L should be saved for same.
Result: 9 Pass vs. 3 Fail
We survived a pay cut in 2009 and mortgage has been my first liability ever in life. So I realized the importance of reducing the mortgage amount by prepaying the same. This goal somewhere got modified as save 6 EMIs as emergency fund because my DH was not in favor of prepaying mortgage. I saved 9 EMIs as emergency fund, way more than my set goal.

4) Contribute to retirement as per the plan.
Result: 12 Pass vs. 0 Fail
Well, this part requires least of the effort as everything I do is automated. So I can hardly fail on it unless I don’t have funds in my accounts which have not happened even once in last year. Thanks Murphy and GOD for that.

5) Be less obsessive on daily tracking of things.
Result: 10 Pass vs. 2 Fail
I think I already confessed here that I was obsessed for tracking every penny spent. But then I realized that I should overcome my obsession or in fact was forced by my DH for same (he doesn’t like to be accountable for number of Pepsi’s he drinks in a day).

A confession, my life is stress free once I got rid of this habit. I still track how much we spend in a month but no need to know how much went for Pepsi and how much for other things.

And one last thing to mention on this point, I have started the tracking again because I want to get the idea of expenses we incur in new place and was suggested by DH himself but it is stress free so far.

6) Learn to swim.
Result: BIG FAIL
I love water and that’s why always wanted to learn to swim. And I have a sinusitis problem which once again made it impossible for me to swim. This will be in my list of things to do before I die.

7) Improve healthy eating.
Result: 8 Pass vs. 4 Fail
Though number shows another picture I can say that it is still close to failure. I need major improvement health wise. That’s one area of my life that I neglected till date (I was almost about to reveal my age. OMG). This area needs major focus next year.

8) Earning Rs 50250 (2010*25) extra in 2010
Result: 9 Pass vs. 3 Fail
I don’t do any extra work other then my full time job and house hold chores and I don’t pay myself for latter. This mainly comes from passive income, reward points and gifts. Yes I actually try to save all the cash gifts I receive and some amount corresponding to all the materialistic gifts as well from my budgeted amount. Did I hear insane? Well I’ll say it is just a mental technique to improve my savings.

2010 Goals Tracking - November End

noreply@blogger.com (Ideas to Simplify and Manage Your Finances.) — Tue, 30 Nov 2010 14:30:00 +0000

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 November end and as I promised this month's review includes status of my goals collectively for both the months, October and November.

Goal 1 - Cooking - PASS. Thanks to Hyderabad. :) We are not getting any decent cook here, so I am cooking everyday and so far enjoying it completely. WOW!
Goal 2 - Budget - Don't Know. My Savings is on track, in fact more then on track, so I am assuming that even if I am spending little more, it's OK!
Goal 3 - Save for Mortgage - PASS.
Goal 4 - Save for Retirement - PASS.
Goal 5 - Obsession for tracking - PASS.
Goal 6 - Swimming - Don't Know - Have dropped it for now.
Goal 7 - Healthy Eating - PASS.
Goal 8 - Extra Earnings - PASS. I completed my annual target in November itself. Now whatever I am going to get in December is additional. :)

Recap:
January Recap
February Recap
March Recap
April Recap
May Recap
June Recap
July Recap
August Recap
September Recap
October Recap

My First Lottery Win feels WOW!

noreply@blogger.com (Ideas to Simplify and Manage Your Finances.) — Sun, 28 Nov 2010 12:12:00 +0000

Yes, you read it correctly. No I am not a gambling addict but as i have mentioned so many times I am jinxed ;)

Little background, before 26th November 2010, I had never ever won any lottery. I never won Tambola/Housie :(. In fact, I was so unlucky that I have never heard my name in any chit picking game. Once in my college, our lab seats were to be decided by picking up the slips and out of 40 students, I was the last one whose name slip never got picked and I had to take the last seat left :(

But not anymore. On 26th November, in our office party, I won in Tambola, not one but two prizes. One first five and then completing third row.

Do you wanna know how it felt, awesome, purely awesome. I am feeling so lucky again :)

Just wondering how some small things cam make you feel almost half of your age, and no I am not revealing mine :D

2010 Goals Tracking - October End

noreply@blogger.com (Ideas to Simplify and Manage Your Finances.) — Sun, 31 Oct 2010 13:15:00 +0000

Multi Level Marketing - MonaVie is another sucker

noreply@blogger.com (Ideas to Simplify and Manage Your Finances.) — Fri, 22 Oct 2010 04:19:00 +0000

Not only Amway, there are other such organizations that one should be aware of.
I read this article recently, and couldn't stop posting it. Please go on and read MonaVie Scam's story from one of the reputed blogger, Lazy Man and Money.

Always keep in mind, there is no wealth without hard and smart work. :)

Have a nice day.

Bad service with such reputed names

noreply@blogger.com (Ideas to Simplify and Manage Your Finances.) — Mon, 11 Oct 2010 09:05:00 +0000

I always wonder whether it’s only me who is so unfortunate when it comes to public dealing or is it about everyone and I am just more vocal then others?

Recently, I shifted to Hyderabad and decided to use Agarwal Packers and Movers for relocation. I heard lots of good things about them but my experience has been bad in short.

They promised to bring wooden frames for packing stuff like fridge and washing machine but they never got same on packing day. As a result my refrigerator got so many scratches. :(

Also, while packing Gas Stove + empty cylinder, they told me that no need to enter Cylinder separately as it is part of Gas Stove. When I received my stuff, Cylinder is missing now they give me excuses like it is not mentioned in the list. Customer care is not at all helpful.

I would never ever recommend any one to use Agarwal Packers and Movers. They promise big but deliver NILL.

And then our good old LIC. I am jinxed for sure. :(

My DH wanted to get term insurance from LIC, a good principal of PF right. I couldn't find even a single agent ready to do that. Even the online site, PolicyBazaar cheated, took the money, and never gave the policy. Finally, one agent agreed to make a term policy but after the cheque got cleared he forced my DH to first buy a huge ULIP through him and then only he will process term papers. Literal blackmailing.

No wonders I HATE LIC. :(

My personal rants, genuine feedback on the kind of service I receive.

2010 Goals Tracking - September End

noreply@blogger.com (Ideas to Simplify and Manage Your Finances.) — Thu, 30 Sep 2010 16:30:00 +0000

Little Update on my end

noreply@blogger.com (Ideas to Simplify and Manage Your Finances.) — Wed, 15 Sep 2010 10:31:00 +0000

My posting here became very sparse because I was very unhappy with my job and redirected all my energies to doing something about it.

Few months back I got an offer from some org in another city but couldn't join it because of personal reasons.

My DH and me, mutually, decided that we both wanna change our jobs and hence started hunt once again. He got a job in Hyderabad and finally I also got one there. So we are relocating to Hyderabad.

So, I am sure i'll be able to resume my thoughts on money here once my relocation is done. Its just few more days to go and I am really reverse counting them.

Any packing/relocating tips from any of you guys? Please do let me know.

2010 Goals Tracking - August End

noreply@blogger.com (Ideas to Simplify and Manage Your Finances.) — Tue, 31 Aug 2010 16:30:00 +0000

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 August 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.
Goal 5 - Obsession for tracking - PASS
Goal 6 - Swimming - Don't Know - Have dropped it for now.
Goal 7 - Healthy Eating - PASS - August is my birthday month. So I finally gifted myself with a plan to have healthy life. August being the first month on it kept me motivated throughout the month. And best part I already see difference in my overall health. Wow!
Goal 8 - Extra Earnings - PASS.
Wow, all goals seemed to PASS. This is my first such a wonderful month of the year.
I have some major updates, will be posting them soon. Big changes happening over here. :(

And one last thing, I really miss two of the blogging friends who have taken their blog private. SavingSavvyPinkey and Emily. Hope to connect with u both soon.

Recap:
January Recap
February Recap
March Recap
April Recap
May Recap
June Recap
July Recap

Independence Day

noreply@blogger.com (Ideas to Simplify and Manage Your Finances.) — Sat, 14 Aug 2010 18:29:00 +0000

Happy Independence Day to all of us.

I love this day more because its also my Mom's birthday.
Happy bday mama.. and thanks for spending your best years on my worst years. :)

Enjoy the day off :)

2010 Goals Tracking - July End

noreply@blogger.com (Ideas to Simplify and Manage Your Finances.) — Sat, 31 Jul 2010 16:30:00 +0000

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 July end and let's see how am I fairing in these goals.
Goal 1 - Cooking - FAIL - I wish I could cheat and remove it altogether from my goal list.
Goal 2 - Budget - FAIL - Second in a row :(. Its not my(read our) fault this time. My DH had to board a flight for which he will be reimbursed later. The reimbursement will bring us back in budget.
Goal 3 - Save for Mortgage - FAIL - see Goal 2 and Goal 4.
Goal 4 - Save for Retirement - PASS. Infact little more than planned (automated).
Goal 5 - Obsession for tracking - PASS. Oh Unbelievable I really acheived it. Now I just spend some 3-4 hours in month from some 1-2 hours daily. WOW!
Goal 6 - Swimming - Don't Know - Have dropped it for now. Health wise I am having testing times from last 3-4 months. 2 Food poisoning, 2 Viral Fevers, Sinus attack.. I feel like double my age most of the times. More on this in another post that I am planning to work on for last 1 month. :(
Goal 7 - Healthy Eating - FAIL. - Read Goal 6. :(
Goal 8 - Extra Earnings - FAIL. - For now my everyday chores are tough for me. Don't know how to do this! :(
Recap:
January Recap
February Recap
March Recap
April Recap
May Recap
June Recap

2010 Goals Tracking - June End

noreply@blogger.com (Ideas to Simplify and Manage Your Finances.) — Thu, 01 Jul 2010 06:41:00 +0000

2010 Goals Tracking - May End

noreply@blogger.com (Ideas to Simplify and Manage Your Finances.) — Mon, 31 May 2010 16:30:00 +0000

A Simple Thought on Money

noreply@blogger.com (Ideas to Simplify and Manage Your Finances.) — Fri, 28 May 2010 12:30:00 +0000

You know when human civilizations were naive, people used to use barter system to trade across with each other. That system became complex and difficult to manage over the time and hence came the concept of money in picture.

Money was actually devised to make spending easier. In fact, as per its origin, it is valuable only if you can trade it for some stuff or service you need. But as per my view it is valuable even if you save it and not spend it. Saving the money will give you peace of mind that if some emergency strikes, you can tackle it relatively peacefully.

Funny isn't it?

Couple of Frugal Tips

noreply@blogger.com (Ideas to Simplify and Manage Your Finances.) — Thu, 27 May 2010 12:30:00 +0000

I was always a frugal growing up. I would have been big spender in my late years if I would not have faced something like Mumbai Floods so early in my spending days. It changed my outlook towards money and stuff completely.

Side effects of my experience, I might not be a minimalist but I am not a collector either. I use and possess lot of stuff but I don't buy anything ever that is very good but I might need it after some time. I always postpone such purchases till the point I actually need it. 75% of the things it turns out that I actually never got to need it.

Secondly, as some of my friends here are aware that I am on actually spending freeze for one year. I am restraining myself from buying anything new for more then a year. In retrospection that's what I always do. I always abide by the policy of "Only Replacing the things that I Love". What this means is that generally I am very satisfied with 5 skirts, 2 jeans, 4 pair of shoes and so on. Whenever I go shopping I can easily curb the urge to buy anything new till all my possessions are in good shape. If, however, any of the things are torn off, I feel absolutely comfortable and OK to go ahead and buy them.

This helps in achieving two goals, one not possession loads of stuff and second never having materialistic possessions of more then 3L. Side effect, this tuning of money attitude saves me load of money.

Give it a try on your own. Start with any one thing, and decide how many of them are just good enough for you. Once you have that number train your mind to not buy them new till they are in good shape and replace it soon once it is torn off. Once mastered, it will help you save a lot by curbing the urge to buy the unnecessary things.

What leads to frugality?

noreply@blogger.com (Ideas to Simplify and Manage Your Finances.) — Wed, 26 May 2010 12:30:00 +0000

I have heard this so many times that being rich people generally are miser and very conscious about spending money. And I have also heard lots of people commenting on someone's frugality like, "he was poor when growing up, he is a compulsive frugal now even if he can afford it."

The latest comment really provoked my thoughts if that is true. Looking around me I don't actually agree with any such characterization. I have seen all kind of frugal people, those who were always rich, those who were poor once, and those who were middle class once. I have actually seen lots of frugal people in all the above categories. (As a side note: I guess that’s why people say Indians are Miser, Indians are actually very very frugal, I dare not say miser. P.S. I am an Indian Too.)

Why Rich can be Frugal?
I have already written a post about my thoughts on this. Read it here.

Why "one-time-poor" are frugal?
When you are poor you just have to struggle more then any one else. Even necessities are tough to get in such circumstances. Hence, they need to watch every penny they spend, because even a penny waste might mean that you won't be able to pay some bill.

When they get any extra money, they tend to save it, so that it can be used to pay some future bill. In the process, after working very hard and saving all the extra bucks rather then spending them on wants, they never realize that they are above the threshold now. They never realize that they can actually now pay all the bills even if they splurge some part of their money. They don't know how to put a full stop at the attitude of save-for-future. It's just like a law of Newton, A body in motion will always be in motion until some external force is applied. In their case that external force is just not there.

Why "middle-class" people can be frugal?
I think for two primary reasons, one they are scared that if they won't they will go to poor category and second they want to be in first category of being rich. I am now in middle class and both these reasons are personal. I am scared of first and my DH thinks latter way.

What do you think? Any special people are frugal or it is more to do with an individual rather then class you belong to?

Guilt of affording it

noreply@blogger.com (Ideas to Simplify and Manage Your Finances.) — Tue, 25 May 2010 05:56:00 +0000

Early life
Throughout my childhood I have lived a frugal lifestyle. Ours was a single-income home and hence, money was limited and generally less then everybody's cumulative needs. I used to get my pocket money and I don't remember even one incident when I had no money at the end of month. My money philosophy used to be simple, "avoid splurge today for a need of tomorrow". My dad sometimes, to tease my frugal ideas, used to say that I have more savings then him. Then I started working and was still frugal. I had a goal to save for my further studies and hence lived like a student even while working.

Some of my friends used to tell me that I am living a life of deprivation and I agree. There was no balance in my life at that point in time. I made those choices in earlier life because of two reasons, firstly because I wanted to enjoy my working life and second because I used to feel guilt of spending my dad's earned money on my wish lists. In those days, whenever I used to feel sad, I used to tell myself that this is the only way to have comfortable life that I dream about.

Employment Effects
I officially finished my studies in 2005 and started working thereafter. I told myself that now is the time to get rid of frugal attitude and enjoy the materialistic things. I started splurging on things that I loved clothes, jewellery and travelling. I convinced my self that it’s OK to spend 40% of my salary on these things and save rest. I know that it’s not necessary to save all that I earn now.

Marriage Happened
After 3 years I got married. Then came few months where I was only spending all the money that I am earning. First year of my marriage I could hardly save anything for retirement. I understood that I am building my home from scratch and hence this is bound to happen. Before my marriage completed first year, recession hit. We took pay cuts and got little more conscious about spending the money. As a result, we sailed smoothly in recession year as well.

Current Situation
Now I am again at point of time where I have no immediate expenses. I have everything that I need at my home; I have bought my new car with down payment, hence less of recurring cost of maintenance for now. I am again on track to save for retirement; I am again building my EF.

Of course I feel blessed and happy about my financial status. I am doing OK, not making any dumb choices, cutting the corners where needed and enjoying a balance between today and tomorrow. I can afford to indulge in few things that I love but others find extravagant. That makes me feel guilty of spending, guilt of being able to afford it. Not so encouraging comments from friends and family in some cases make it even worst. I find it very annoying and depressing when somebody comments on my indulgence without even considering that it might really matter to me or it might be that I have first saved for it. I have actually heard few things like, "wow, can you really afford a lunch at 5 star hotel on some XXX occasion", "you spend Rs 700 on a game, that's too much." At such occasions, I feel guilt of being able to afford some thing that my peers probably can't afford.

Why should I feel guilt on such occasions? I have worked hard for being at a place where I am today. I have made some very difficult choices in my life to have my current life. And above all, when I was making those choices and my peers were having fun, I never felt bad for myself or them. Rather I used to feel happy for them and used to motivate myself that I am going to have better life someday. But the ground reality is I feel bad.

Does anyone else also experience same? If yes, how you guys handle it?

Excess of anything is bad

noreply@blogger.com (Ideas to Simplify and Manage Your Finances.) — Thu, 20 May 2010 12:30:00 +0000

Not long back, till just one and a half months back, I used to be obsessed for tracking my expenses. I am maintaining my excel sheet from last so many years and never thought that I could survive without doing this.

In fact, I used to love playing with my excel sheet. It's so elaborative and detailed that I can tell all the transactions of my all bank accounts just looking at my detailed sheet.

Then one day I realized it is actually controlling me. This happened when my DH asked for something and I told him that "we are over budget in this category, so will you mind waiting for one week so that I can buy this for you next month." Very bad of me. He was being very supportive with me on budget and all after he managed the expenses for a month, but he didn't take it too well. He told me you are being too much finicky about small things and don't realize that probably in few years from now we might not be able to consume these things.

I actually thought about it and then realized that its true. My budget certainly is a very useful tool. We allocate a fixed amount of money each month for our monthly home expenses. Budgeting and tracking helps me save some money every month from our allocated money for home expenses. But what will happen if I'll not be able to save that amount each month. It will not derail my savings plan or retirement savings at all.

So I decided to try something very different for the first time in my life. I paid all the bills as usual. Then I withdraw one-third of original allocated amount as cash and kept in drawer. I told my DH now he can buy anything he wants from the money kept in drawer. No need to inform me as I am quitting tracking for some time. After paying all the bills and withdrawing one-third of the money as cash, I was still having some Rs. 7K in my home account. Few of my bills come towards the end of the month. This made sure that I have money for them. I prepared my self that I might go overboard by some 5K this month. Once the cash got finished, I got more money from my account and again kept them in drawer.

At the end of the month, I was over budget by only Rs. 1500. Yes given due to my strict tracking and budgeting previously, I generally used to save 3-4 K of my home expenses money. It meant that we spent around Rs 5K more then usual. But rather then counting this as failure, I was satisfied. This is the amount that I can certainly afford to spend to have more peaceful life. I am convinced that because of all the good habits that we have developed over years, we will be able to do well just like this month even without strict budgeting.

So, I changed my budgeting and tracking system for now. I am not going to enter each day expenses in my detailed sheet. Rather, I'll just be tracking when I am paying bills directly through my bank account or withdrawing money from there. Once money is withdrawn, it can be spend without noting anywhere where we are spending it. This one month change helped me in realizing that I actually loose my peace of mind sometimes because of excessive tracking. And excess of any thing, even good thing, is bad my dear friend.

As a side note, it was very difficult for me to not-track my expenses. You guys might not believe but in initial few weeks, I used to still open my excel sheet around 5-7 times a day and used to keep staring at it. I used to feel bad for not entering my expenses. But now finally I am evolved. Now I open my sheet only once a day, that too just to update my stock balances and to enter any transactions through my banks. It was tough but worth it.

How about you? Do any of you are also so obsessed for tracking as used to be? Or You guys plain lucky to be not insane just like me?

This also happens sometimes...

noreply@blogger.com (Ideas to Simplify and Manage Your Finances.) — Wed, 19 May 2010 07:28:00 +0000

Getting rich is everybody's dream, at least, that can be general statement which applies to 50% of the population on this earth. I am not against anybody's dream and effort to become rich. What I am totally against is when people push me in their get-rich-quick-scheme-with-little-work. Yes, I am very skeptical of all these ideas and am totally uninterested in becoming members of anything like Amway, Oriflamme etc.

Last weekend, couple of my DH's friends were supposed to visit us. They brought some more 3 people along with them. My DH's friend decided to keep silent and one of the 3 strangers started talking to us. He took out an A4 sheet and pen from his bag and here was how our conversation went:

Stranger#1: What you all do?
DH: We both are engineers.
Stranger#1: Why do you work?
DH: To earn money.
Me: (Interrupted them to add) and to keep ourselves busy and do what I love a lot, programming.
Stranger#1: (looking towards me) Wow. That's unheard of. I myself work in same field for last 12 years and he (stranger#2) is in this field from last 18 years in XYZ Company (a very big company).
Me: Great. It's nice to meet you all.
Stranger#1: So, imagine what you will do if you are told to retire today.
Me: (looking little confused) and that means?
Stranger#1: If you get some 1-2 crore rupee today and you get some monthly income throughout your further life without your current job what will you do?
DH: Don't know.
Me: (DH is already looking at me, means ball is in my court) Will probably still go to my job because I love my work if nothing else there.
Stranger#1: (Little surprised) you have no dreams or goals in your life?
DH: We do have and we are already living our dream life kind of. (I was elated hearing this.)
Stranger#1: Would you still like to work.
DH: Yes, may be then I'll be doing more of farming, probably apple farming somewhere.
Stranger#1: Wow, I would also like to do farming after retirement. (Turning to me now) So, what will you do then?
Me: Nothing extra ordinary. Pretty much the same what I am doing now.
Stranger#1: (More surprised) so what do you do now with your money.
Me: Nothing. My DH's salary is sufficient for two of us. Mine is used for extravagant things. That's all.
Stranger#1: (Thinking that he is not going anywhere with me) won’t you like to go on shopping spree or jewellery collection if given lots of money?
Me: No. I am very much happy with what I have and what I can buy today.
Stranger#1: I am shocked. You are the first woman who is saying that she is not interested in jewellery and shopping. (Well please note that I never said that. All I said that I am content with what I have.)
Stranger#2: I am shocked too. My wife last month demanded Rs.40 Lakhs bangles from me.
Me: (Now I am shocked) Good. But I am not interested in them.
Stranger#1: (giving disgusting look to my house) is this your dream home?
Me: Yes very much.
Stranger#1: I am surprised. I have never seen a more content person then you in my life. All the credit goes to you (to my DH).
Me: (Just smiled)
Stranger#1: (To my DH now) so do you like travelling?
DH: Yes.
Stranger#1: Where will you go travelling when you will have money?
DH: We both love exploring India. We will visit rest of the places that we have still not visited.
Stranger#1: Why India. That's the problem. We all learn to dream small. You don't want to go anywhere outside India?
DH: Yes probably once to Vancouver again because I have studied there.
Stranger#1: See, and we have a scheme where this all will be possible in just
few years with little work.

Do I need to tell you that I hated him and his ideas! I absolutely love my house. I live in one of the posh most areas of my city. I drive the car that I love. I travel in India because we both are crazy to explore India and let me tell you visiting places like Kashmir, Sikkim, Kerala cost you more money then traveling is so called destinations like Malaysia, Thailand etc.

He approached us all wrong. He must have come across those people who think that their life sucks and that more money will make them happy. Not me at least. By demeaning the things that I absolutely love he is never going to get what he wanted. I am never going to join what ever quick-rich scheme he has.

I don't know but I can't stop thinking bad about that day and those people.
What do you feel. Am I too skeptical for these kind of people or were they actually so annoying?