Wednesday, February 22, 2012

Keeping track of money

There was a time, some four years into our marriage, when Kevin and I were forced to tighten the purse strings a little. We had been hit by the Internet boom and slump; our food website, Eat Your Art Out, had almost made it to STAR venture capital funding... and then, it had fallen through. It had been a labour of love; we knew nothing about marketing a site, or getting ads for it, but we spent a substantial (to us) amount of money getting it designed, paying for it to be hosted, getting food photography done, and all the countless other things that go into running a website. When we finally decided to pull the plug, we were sad and somewhat down in the pocket.
I truly believe everyone should have a chance to know what it is to be forced to make choices. When Mohan and I were growing up, my parents worked hard, the money was always only just enough – but my mom made sure there was good, healthy food on the table and lots of fruit; I got my pretty dresses thrice a year (Easter, Christmas and birthdays) and we had sturdy shoes. I was thrilled each time I received my cousins’ pretty `foreign’ dresses when they had outgrown them, and we kept them nice and passed them on to other cousins in turn.  My father took us on long bus rides, and to the zoo and aquarium, and Sunday matinee shows at Sterling. When it was time for a treat, we went to Paradise restaurant in Colaba – then an institution – and really enjoyed the Chinese Fried Rice and Mixed Grill we always ordered. The visit to Paradise or even the ordering in from it signalled an important occasion – it was where Mohan and I were despatched while my parents grilled Kevin when he came to ask them for my hand in marriage. We did fly to Mangalore every year and stay in nice hotels on annual holidays – courtesy my father’s company’s benevolence. And of course, as both my parents rose in their respective jobs, life did get easier – much easier. But we were never extravagant. And yet, we really had a very good life and a very memorable childhood.

 The bombil thali at the Grant Road Station Gomantak

So, when Kevin and I had to eat out on a budget, it was not that catastrophic. We used to restrict ourselves to Rs 100 a meal for the two of us, and it was a happy challenge to see where that would get us. One of our favourites was a little Gomantak near Grant Road Station where bombil thalis used to be Rs 40 (we went recently again and they cost Rs 65!). And Sandeep Gomantak in Bora Bazaar. And of course, New Martin Lunch Home. And any of the Kamats... Oh, the list was endless, and madly fun to add to.
Today, by the grace of God, we don’t have to scrounge around. But my mother’s careful budgeting has caught up with me. I used to tease her about going to Crawford Market for everything; you’ll find me there afternoons. And I do like to know where money is being spent; I do like to shop at Sahakari Bhandar so I can look at the deals and I do like to spend the money saved on other things. I like having that choice.
Of course, all this record keeping is easier said than done. I have started keeping diaries over the years in which to record daily expenses, but never kept them well. The online banking systems do help to a certain extent in helping you see your withdrawals, but the system that I find really works is an envelope system. It is an old-fashioned notion – you estimate how much you spend on different categories every month, withdraw that from the bank, and stash it in different envelopes marked Eating Out, Groceries, Milk, Fuel, etc.  Then, each time you have to spend, you remove the money from the relevant envelope and write the amount on it. In a month or two, you will see how much you are really spending on different categories. Since a lot of bills are paid online and by cheque, you can track these in a diary or on your phone so you get a consolidated picture of your spends.

Or do it like me and get a Pear Budget ( account – it’s like an online envelope system. I am not a blogger of any standing, so you can be assured that this is not a sponsored post. I found Pear Budget when I was scouting for ways to keep track of my spending patterns. It is not free – it costs about Rs 250 a month to maintain your account, but it is way easier than all the free systems available on the Internet. Basically, you fill in a whole lot of categories and what you estimate you will spend on them every month in advance; you enter your month’s earnings at the beginning of the month and then you just keep entering your receipts every time you make a payment – online or offline. The tag space with each entry allows you to keep track of relevant information – like transaction codes for bill payments. I find it incredibly useful because I can see at once what payments have been made each month, and on what date, and I use it in conjunction with my online banking account.  There is a month’s free trial, so do take advantage of that if you think it would work for you.

Phew, that was a long post! Travelling on work this next week – so may or may not be able to post. Let me know how you keep your finances in order – or on track!



  1. Great tips! Will store away for future use :)

  2. I loved wearing your dresses. And Nalini loves her hand me downs. I think it builds relationships. It's fun being frugal. We have been doing that recently, trying to eat out of our garden and preserve what we don't use for later in pickles and things. There seems to be so much crap around today, it's good to remember the simple well made things. I remember those twice yearly dresses my mother made me I suspect a lot more than my Nalini will remember her numerous glorious frocks. Take care vaneeta

  3. Hey Prima,
    Yes you are doing it very meticulously even after years of book-keeping. I would suggest that over a period of 6 months you would know on an average how much goes for food per month, rent is fixed for a year - hence per month, utilities are also fixed and so does on an average for transportation. This is the basics for a household. Anything above this is over budget and a luxury. Of course the school/college fees are fixed and have to be budgeted years ahead including donations to authorities. Here in Toronto/Canada, school fees are taken care of by the government (by the taxes we all have to pay) up to Grade 12. So only the post secondary education has to planned beforehand. In Toronto, sales of food, clothing and practically everything are there, provided one takes the time to search in weekly flyers or online stores. So everything adds up. Even for Life Insurance, it is better to go in for a Term Policy because after retirement one cannot be expected to pay the premiums which are a drain on retirement savings. Also you have not touched on saving for retirement which can be started by the parents at the age of 18 years which has to be continued by the child until the age of retirement (60 or 65 years) to give a nice little nest egg for retirement.


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