Budgeting for 2009–Published in Goodhousekeeping January 2009

Believe it or not, the economic slowdown can have an upside. In the momentum of earn, earn, earn, and spend, spend, spend, there were compromises made…health, home efficiencies such as quality of help, quality of food, and time spent with family are all examples of these compromises. It is time to reflect on the situation and put some discipline and systems into effect.

This planning will make you stronger for the next boom and for all
unexpected situations that occur. With proper planning a u-turn on
your life goals and lifestyle need not be the case. Elimination of
waste however, will be a necessary part of the change needed.

The fact is that if you were born post 1970, you will have never
really seen difficult times or were too young to remember them. By the time you were working age, the economy was in the midst of being liberalized or India was already booming. With this boom brought unprecedented optimism and risk taking. Your parents on the other hand, have seen frugal times where money did not come easy and that is why they are cautious savers.

It is never too late to take stock of your finances and make a plan….yes a budget, first for the New Year and then for the years to come. A budget and a few financial resolutions will take you on the right road to sound financial health.

Here is how to get started. Keep a separate ledger for your budget. Home budgeting software such as Tally and Quicken are available but a separate notebook works just as well as long as you are consistent in making entries. Keep a small diary in your purse to write down what is spent. Initially this may be necessary as accuracy and writing down the small expenditures is important.

1. List your financial goals, both long and short term. At the top of the list is an emergency fund for unforeseen circumstances, medical bills or job loss for example. Long term goals is saving for childrens’ education/marriages. Short term may be to purchase the latest flat screen television. Aim to have saved the equivalent of at least six months of your income in easily accessible instruments.

2. Next make a list of all your current expenses. Include everything that you need to live on including utility bills, household help, phone expenses, loan repayments, EMIs, health care, beauty parlour, entertainment etc. Make this list detailed and with sub-categories. Food should be listed separate from lunches out at office. Groceries should be broken up into milk/meat/rations/ etc. If you are unsure of the exact amount then estimate the amount. Also include money for savings.

3. Compute your monthly income. If it varies, then take the average of the last 3 months. Alternately, use your lowest income projection to be on the safe side. Now compare the total monthly income with the list of expenses.

3. Adjust your budget to reflect the difference between what you earn and what you spend. If your expenses total up to more than your monthly income, then take appropriate action and turn around your spending. If you spend less than what you earn on a monthly basis then that is the first step to financial savings.

4. Go over your expenses and see what items are wasteful. Can you do without them or less of them…for example perhaps buying the latest cell phone or having that expensive spa treatment can be done less often.

5. Plan a meeting to discuss finances with your spouse. Communication about expenses and goals are necessary. Working together on money may be difficult at first if you have different opinions and habits, but over time, the effort will pay off. Give older children allowances and teach them budgeting skills as well.

6. Calculate the money you need on a monthly basis to achieve your long term and short term goals. If you are able to meet them then you are on your way to financial success. If not, then you need to make some more efforts in saving to achieve the goals…but do not fret as you are in the majority. A bit of effort in hardcore budgeting and savings will help you reach your goal.

7. Review your budget with your spouse every few months. There may be other needs you may have or other savings possible.

The old saying “a penny saved is a penny earned” holds true even today, and is one of the paths to sound financial health. This does not mean being “stingy” or “cheap” just financially watchful and keeping track of waste.

Here are a few resolutions:
1. Pay off debt. Credit card debt is the single largest money waster. Interest on credit cards is a minimum of 19% and this does not include late fees and fees for non-payment. If you pay less than the due amount more than one month then interest is compounded on the principle and interest of the previous month. Pay cash for goods or pay the entire amount of the credit card on time. If you have an EMI that you are paying then continue to pay it monthly keeping a watch on interest rates if you have used a variable interest rate. When interest is at a higher rate then it may be a good idea to pay off some principal with a balloon payment.
2. Pay your bills on time. Electricity companies and phone companies charge you if you do not pay in time. Rs.50 every month adds up. Keep track of when the payments are due as many times bills arrive late and the burden of timely payment remains with you.
3. Conserve cash. Go to each category of your budget and see which items can be trimmed. The following are only a few examples. Each person should go to her own budget and see where saving can be done.
Lunch –Do you buy lunch everyday? How about packing a lunch, start with twice a week and see if it is feasible everyday.
Expensive coffees – A coffee a day at Barista at Rs.60 adds up to Rs.1800/- per month…there is a huge room for savings here.

Groceries – Buy seasonal vegetables and fruits. Not only are they less expensive but they are tastier as well. Buy local foods. Nothing that has traveled many miles can be very fresh and you bear the transport cost. Buy in bulk carefully. Many times purchasing too much at one time is wasted.
Never shop when hungry. If you go to the grocers with an empty stomach then you end up buying more than you need. Junk food becomes even more tempting.

Entertainment –Have a drink at home or a friend’s place before going out for dinner. The alcohol component to any meal out is often the highest. Some restaurants allow you to bring your own wine. This is substantial savings possible here.
Learn how to cook. Cooking can be relaxing and a creative art. And with today’s urban diseases such as diabetes and hypertension emphasizing the importance of weight control, there is no better solution than home made food, not to mention the savings as compared to eating out.
Go to less expensive restaurants – If you do eat out often then remember the good joints where you got good food for less. Go to these places more often and the expensive places for special occasions.

Transport –Carpool when possible. Make fewer trips to the stores. Walk and take public transport.

Shopping – Look out for bargains. Many cloth sales take place during the monsoons for example. If you need new curtains this is the time to buy. Big ticket items such as home appliances are well priced during Dussera and Diwali. And remember when you are shopping during sales watch what you buy, do not buy unnecessary things only because they were “on sale.”

Downsize – Think before buying…if you really need it. Do you have space for it, can you do without it for a bit longer, will it make much difference to your life if you do not buy it?
Think about the extra junk that you already have lying around. Perhaps you can make some money by selling valuable items no longer needed. Online auction sites such as ebay allow you to do this easily.

Check and track bills- Look at all of your bills. Get rid of things that you are not using like gym memberships or cell phones that you are not utilizing. Call other service providers and ask if they can get you a better deal. Track your electricity bills and watch your usage.

Banking –Know what your bank is charging for and act accordingly. Are you paying for chequebooks or less than minimal balance fees? Negotiate with your bank to cut fees, especially if you have multiple accounts, have FDs, or make investments through the same bank. Keep track of your statements and check periodically online to make sure it is accurate. Banks and computers do make mistakes. Update passbooks and compare against the statements sent home.

Libraries—Join libraries, instead of buying books and DVDs. Remember to return them on time to avoid late fees.

Gifts—Buying gift cards is easy but a little more thought into gift giving can save money and make the gifted happy. Shopping around and picking a book or shirt of the person’s liking may save you money. Also a hand made card is appreciated and most likely to kept longer.

4. Learn the basics of Finance—Every person should learn the core concepts of basic finance. The fundamentals of how money grows, simple and compounded interest, etc. are important. If your husband handles the investing then learn where the money is going and why. After feeling comfortable with this then you can begin investing. If you need company to invest, join an investment club where people meet to discuss where the best instruments are to invest. You can also start one of these with friends.

An idea of spending patterns can be determined after tracking expenses and writing them down. So begin the New Year with a suitable budget and you will be on your way to sound financial health.

Arti Karve
Aarti Karve, a Bangalore based software engineer began her career only a year ago and has learned budgeting skills early on. Aarti saves a high proportion of her salary. “My aim is to have a secure future so it is important to save. As I do not have many family responsibilities (financially), I manage to save 65% of my salary unless I make any huge expenditure like paying for my education, buying new things or traveling. I also want to remain independent and that also takes saving. An emergency fund is necessary,” she says.
Most of her expenses are phone bills, travel to visit family, and her daily room and board expenses. Aarti’s company provides transport and other than a few nights out with friends, she has few temptations to spend.
Is Aarti unique, don’t many working singles spend beyond their means or are able to save very little these days? It depends on two factors, goals and upbringing. The habits one learns when growing up as well the financial goals when one is earning. Aarti has learned good budgeting habits from her family and close friends and living independently forced her to manage finances on her own.
“My financial goal for 2009 is to save the maximum money possible since it is good to be financially secure and once I have good amount of savings I can spend that without any loans or EMIs. Many of my colleagues have a spend now attitude as they feel when they do have a family they may not be able to spend on themselves,” she says.
Manjusha Bhide
Manjusha Bhide took time off to raise her three children after getting her PhD in biochemistry. She lives in a heritage bungalow that was built by her great father-in-law. “Since we are talking about money I must tell you that maintaining this house takes a lot of cash. Constant repairs and upkeep is getting expensive and it takes a large chunk out of our budget,” she says.
However, now there is no option to move so soon, so she will enjoy the house while she can. Her goal for the 2009 is to give wisely. “We like to donate to charity and in addition we give low or no interest loans to needy people. In the past, we have over extended ourselves. Sometimes the loans are not repaid and we lose money. The same returned money I could use to help someone else but if it is not repaid then I have to dip into my own savings to help the next person who asks for a loan,” Manjusha declares.
Manjusha plans to cut down her eating out as she feels that a feeling of satisfaction rarely comes after eating in a fancy restaurant. “It is rare to get your money’s worth. It is better to eat in an average hotel where you know the food is good. Many times the fancy restaurants or 5-stars are not up to the mark.”
Retirement and children’s education are her main saving goals and being conservative with spending, saving has not been a problem. Savings parked in stocks has depleted, but she is hopeful that the sensex scenario will improve.


Start Afresh –Published in Goodhousekeeping January 2009

Let the New Year be a time to make a brand new change… Positive thinking, better eating habits, keeping one’s temper in check, and taking care of our home and health are all matters that are important to us. Here, Rita Date introduces you to seven women who’ve resolved to make 2009 better for themselves and their families, and how they plan on “keeping their resolutions”

‘I’m determined to be more giving and more patient with my children. I plan my day so I’m less tired, which puts me in a better frame of mind’

‘I want to have better control over my temper when I’m dealing with the children,’ says Vinita Ram (39), mother of two, a 12-year-old daughter and an 11-year-old son in (Pune). An incident that occurred seven years ago made her change her life’s priorities: Her daughter had a life-threatening situation where her asthma had become so severe, she’d literally stopped breathing. Vinita was forced to run with her daughter in her arms to get to the emergency room as her car was stuck in bumper-to-bumper traffic en route to the hospital. She made it to the hospital in the nick of time. Today, her daughter Chitra is a thriving teenager, and Vinita has God to thank for her survival… Since then, Vinita realised that nothing was more important than life itself, and that the smaller things should be treated as negligible. However, over time, this valuable lesson was lost along the way, and she felt her temper beginning to get the better part of her while she was with her two small children.

‘Fatigue is the biggest culprit. I typically lose my temper because I am tired, not because the occasion warrants it. I know it’s pretty unfair to my family, especially my little ones, since I don’t always react to something they have done, so it’s not always their behaviour that they can control or modify,’ she says looking back.

Vinita, a talented graphic designer who is a former COO of a large design firm, eagerly anticipates the coming year. During her past one-year sabbatical, she made it a point to spend extra time with the children. ‘Last year, I was fortunate enough to take a break. The time I was able to spend with my children made me realise what I’d been missing, and I was determined to make the most of this opportunity. I think because I am less tired now, I’m determined to be more giving and patient, and this’ll make it easier for me to make my resolution stick.’

Now work begins again as Vinita has already has started a venture of her own. But this time has made some guidelines for herself regarding work and meetings, so she can limit them to reasonable hours, and still actively contribute and manage without over extending herself. Having her own company will give her better control over working hours.

For the coming year she plans to actively implement a few techniques to keep her patience in check. When she envisages a potential flare-up, she consciously does not saying anything or doing anything in the heat of the moment, and gives herself a time-out for at least ten minutes – that helps her maintain her composure.

‘Remembering something fun that I have done with the children or my pets works as well; it takes the rage out of you so quickly! I will also keep a copy of this article with me as a reminder!’ she says.

So what’s the best way to keep this resolve life-long? Dr Bhooshan Shukla, psychotherapist and child psychologist at Ruby Hall Hospital, Pune says that although anger-control techniques can work, a more proactive approach is beneficial for long-term control over one’s emotions.

Sometimes it’s as simple as being aware of oneself: ‘We should be aware of our emotional state at all times. This will help us realise when we’re angry, so that we don’t give a knee-jerk reaction to every provoking incident. Another suggestion is to accept this anger as part of our behavioural life. We can’t always control our emotions, but we can control our actions,’ says Dr Shukla.

‘There’s a lot to my beauty regime to remember, but I want to make that extra effort’

Deepa Nath (43, Hyderabad) is an artist who specialises in portraits of little girls. After a hectic year with two major exhibitions, it dawned on Deepa that she was neglecting her appearance, especially her skin. ‘I need to take proper care of my skin; otherwise it tends to break out in acne. Only those who have suffered acne know how terrible it feels. Natural remedies work best, but they’re time-consuming. So I tend to cut corners, and this comes back to haunt me,’ she says.

With two teenage children active on the international tennis circuit, Deepa is frequently on the road touring with them at various tennis tournaments. She has two more exhibitions planned for this coming year, but this time she doesn’t want to use her busy schedule as an excuse for neglecting good skin care.
‘Over-the-counter products dry my skin, so I like to experiment with homemade products. Recently I found one that this really works, but I need to make sure I use it regularly,’ she says. Deepa uses a powder made out of oatmeal and almonds. Take both ingredients in equal proportions and blend them in a mixer. Make a paste with rosewater, apply all over the face and wash if off once it’s dry. ‘Any upcoming pimples simply disappear with this formula… Of course I also try and drink as much water as I can, wash my face just with water, and dab it, not rub it with a towel… There’s a lot to remember! I need to make this effort when I am travelling as well. My skin takes a beating during the weeks leading up to my exhibitions and while travelling. So I have to take my special facepack with me, along with everything I need. It’s a process, but this coming year I want to make that extra effort.”

Impeccably dressed and always smiling, Razia Lulla, (61) an English voice and diction trainer and grandmother of two in (Pune), is the epitome of beauty. She seems to be on the right track as far as maintaining herself is concerned, but asked whether she has a beauty resolution for the New Year, she says, ‘Of course there are always improvements to be made, and better care to be taken every year. My skin is extremely dry and I often forget to keep it moisturised. I would like to make sure I make that extra effort this coming year.’

Razia’s beautician advises her to use a night cream, but Razia says she can’t sleep properly when she applies any cream at night. Since Razia moved from Mumbai to Pune several years ago, she’s noticed her skin getting drier every year. Pune’s dry weather doesn’t agree with her and she’s tried to counteract the damage by drinking more water.

‘This year I want to make it a point to moisturise my face more often, even at night. I want to try different night creams to see if they don’t affect my sleep. This is important for me, and I’ll be making a conscious effort,’ she says. ‘Allergic reactions to the cream may hinder sleep,” states dermatologist Pumori Saokar. “Sometimes the allergic reaction is very subtle and cannot be detected easily. Unknown stress also causes sleeplessness. I suggest Razia to experiment with other brands of creams.”

The one habit that she’s consistently tried to develop over the years is increasing her intake of fruit. ‘Fruit helps the skin but I don’t exactly relish it – sweetmeats and desserts are my real weakness. I am planning to try different recipes with fruit this year. Smoothies and lassis are both things I like, so I’ll just add more fresh fruit to them,’ says Razia.

‘I don’t want the small things in life to bog me down. I’m learning to think positive’

Sonali Nambiar is a professor of French and a trainer in soft skills (in Pune). ‘Next September I turn 40. After marriage and children, I feel I’ve really let myself go, so this year I want to make lifestyle changes for better health,’ she says.

Sonali and husband Sunil have always had an active social life, with social engagements nearly every night. ‘Now we’ve cut our socialising down to once a week, but those late nights really took their toll on me. Getting up after a late night, packing the children off to school and getting to work on time – all of this was an uphill task. There was no time to exercise or eat properly.’

Sonali’s already made a few adjustments to her lifestyle, but for the coming year she wants any changes to be permanent and lifelong. ‘I want to get stronger, leaner and fitter; I want to do it slowly, without fad dieting and erratic exercising. In the past, I made resolutions to get thinner but for 2009, I just want to get fitter and healthier. I already feel more confident about being able to achieve my goals,’ she says excitedly.

Moushumi Kuvawala (37, Pune) would like to think positively this coming year, so that she feels calmer and at peace with herself. Remember Richard Carlson’s book Don’t Sweat the Small Stuff – And it’s All Small Stuff? ‘I don’t want my day to get bogged down with smaller issues that are really just inconsequential and shouldn’t be bothering me,’ she says. A happier life, on a day-to-day basis is her goal.

Moushumi, with her limitless energy, rarely sits still. A physical therapist by profession, she runs her own multi-specialty therapy centre with alternative therapies that include reflexology, yoga and psychological counselling. She also runs an antique store along with a partner. ‘I’ve learned that life’s small stresses can lead to greater physiological problems – I see this happening with my patients every day. If you ask somebody if they are stressed, they’ll deny it: Just because they don’t have a major issue such a family bereavement or financial troubles doesn’t mean that they are immune to stress. It’s usually the smaller things of day-to-day living that add to one’s stress levels,’ she says. ‘Managing the house, making sure that everything is working properly, trying to be a “good” mother – these are all examples of life’s daily pressures.’

Attending and arranging lectures on positive thinking, reading books and visiting certain websites on the Internet on the subject have all helped Moushumi. This year, she would like to incorporate what she has learned in her research into her daily life. And how does she plan to do this? ‘I want to be a bit more detached about things; for example, if the Aqua-guard machine needs to be fixed and the person does not show up, I’ll try to follow up patiently with the person and in the meantime buy bottled water. This is really not an issue to stress over, but I think managing these small things does get us down,’ she says.

Dr Shukla believes that Moushumi is taking the steps in the right direction: She’s thinking more positively, but he emphasises the need to recognise our emotional state at all times to help us cope during all types of situations. ‘If there’s a pattern of negativity, then this pattern should be addressed. You can read books and articles to help you resolve one issue at a time, but overall introspection is more helpful,’ says Shukla.

‘I want to make healthy Continental meals as a matter of habit, not just on special occasions’

Jaai Sardesai (39, Pune) is a stay-at-home mom who enjoys cooking and trying out new recipes. In 2009, she would like to find recipes to make healthier foods. ‘We’re all getting older – heart disease and diabetes can occur at any point, so it’s important to watch what we eat. I also want to set a good example for my children. They should also learn about proper nutrition and healthy eating,’ she says.

Jaai wants to make a special effort to cook healthy Continental meals and snacks since her children will enjoy this, and she finds that they’re always clamouring for something other than the usual subzi-roti. ‘If I don’t cook different kinds of foods at home, then the children want to eat out, something I want to prevent.’

Armed with the requisite collection of cookbooks, she is has the necessary tools to begin whipping up her healthy creations. Although she’s experimented with healthy recipes in the past, this year she aims to be more regular. Instead of just making different foods occasionally, Jaai would like to put in the effort to try new, healthy dishes at least twice a week.

‘I’d like to learn a few more healthy cooking tips as well. I’ve already begun: For example, in the white sauce used for pastas and baked dishes, I use wheatflour instead of maida, and cow milk instead of buffalo milk. I feel that these small things make a great difference, without affecting the taste!’

Nutritionist Manisha Angal (Nutritionist, Pune) says that Jaai is on track and the small changes have definitely made an impact. Eating a low-fat diet to maintain a healthy weight is important for long-term health and the most important thing to remember when making any meal healthy is to use more protein in the form of white meat, skimmed-milk paneer or sprouts. ‘More protein, a moderate amount of carbohydrates and a little bit of fat should be kept in mind as the best combination for healthier eating,’ Manisha says.

In addition, for sauces, even roasting the wheatflour without using any oil or butter will make for a tasty sauce. Nuts, dry fruits, green leafy vegetables, and sesame seeds are items that should be incorporated in dishes to make them healthier. Raw foods such as salads are a great source of vitamins, and easy to make, given the variety of continental salad recipes available in books and on the Net.

‘I want my home to speak for all my experiences, travels and creations – by making wall displays for all my bric-a-brac!’

Judging by the interiors of Sonali Khandekar’s house in (Pune) one would think she was an interior designer, not the successful orthodontist she is. Planning, designing and upgrading the interiors of her home are her passions, and she’s turned this home into a veritable haven. Her dental clinic is attached to the house, which means that she spends a lot of time on the premises.

With her ongoing home-improvement projects, what is it about the coming year that will be special for Sonali? She quickly replies with a sonnet: “Off the tables to greater heights, de-clutter the tables and liven up the walls… let each wall speak a tale!”

Sonali has a passion for a number of things in life: home décor, artefacts, travel and meeting people. Every nook and corner of her home is testimony to her zeal for aesthetics in her life. Each room or space says something when you enter or leave. The home that speaks a thousand words is a reservoir of the various items that she’s collected over the years – whether during travels, received as gifts or created by her. ‘I have a fair amount of pieces that I want around me, to take me back me to the memories associated with them. The most appropriate place I could think of to display them seemed to be my table-tops,’ she says.

With a house full of large, open spaces, a courtyard and big window awnings, ample dust enters and collects inside the house – so cleaning and dusting becomes a real problem. Also, adding pieces of furniture to accommodate the memorabilia was also a challenge. ‘I took a break to reflect, looked around me, and found my answer right there… the walls!’

While her house is large and doesn’t look cluttered, Sonali wanted to imagine bare, minimalistic furniture at the ground level. Moreover, she wanted to look up at a wall and be able to read the story the artefact told about her experiences. ‘Why just hang up pictures when you can have cabinets or curios on walls as well… Let each wall be an eclectic mix that tells its own tale… let them bear testimony to my spirit and carry on for longer than I do… let them live to tell, years after I do,’ she says poetically.

‘All the pieces in Sonali’s home give it character and life, and she should definitely show them off. Glass cabinets are a quick fix for displays, but many times, the artefact gets hidden,’ says architect Aparna Phadke. Aparna suggests open shelves on the walls for displaying showpieces, and the use of light-coloured wallpaper and soft lighting to highlight any wall displays.

The coming year, there are plans to hang a couple of small cabinets on the wall as well as some of her art collection. This home-improvement project is a time-consuming one, but one but Sonali is determined to finish soon.