Inflation…the unseen enemy.

Last week we stopped at inflation. Inflation or price rise is a common occurrence which reduces our purchasing power and forces a change in the consumption pattern itself. When we intend to save and invest whatever interest or returns we get from those savings should at least be equal to the rate of inflation if not more.Any return which is less than the rate of inflation will diminish the value of our savings or invested corpus and making us poorer by day.This we will discuss later. Now coming back to inflation if the term still is unclear to you:

Assume your monthly income is 10000 normally spend 4500 INR for your monthly groceries,vegetables and other sundry provisions.Assuming that the cost of some important food items like edible oil,rice,sugar and vegetables gradually increase and sustains for about a year then at the beginning of next year while your income level would have increased nominally due to the increase in DA payable the price rise could take a much bigger cut away from your salary and thereby reduce or even totally wipe our your disposable income.

Inflation occurs mainly due to:

a.  Increase in demand for any item while supply remains low.

b.additional tax levied on raw materials or inputs.

c.poor crop yield.

d.larger imports

e.fluctuation in value of Indian rupees in relation to other currencies.

f.increase in oil prices

to name a few,.

now we all know that none of these is within our control but it is comforting that by prudently diverting our savings and investments in to channels which can give us decent returns. In the world around you there are many people who are focusing on your income and money for their growth. we have seen not long ago that many non banking finance companies offered interest rates as high as 18% and vanished shortly after collecting huge sums from gullible public.As prudence demands we have to safely travel between these two possible scenarios of inflation eating into low returns,high and attractive returns promised but finally our capital itself vanishing.As a common man/woman with limited or no knowledge about the risk,rewards,rules and safeguards it really appears very difficult.But every challenge offers an opportunity to learn something new. Here is an oppurtunity to learn about the most important asset in our life…OUR MONEY..

Let us do it together,








SAVING ….beyond the habit…

Well, last week I said that I will start discussing about the various avenues available for savings and investments.

Now, savings simply put means that part of your income which is not spent. whatever be the income if the individual or the family decides to defer some consumption then savings takes place,.

saving is a process and savings is what is accumulated through that process. The amount thus saved may be put aside in a bank account,any mutual fund scheme,post office accounts,gold or simply held as cash.

The amount thus saved by households is very crucial for economic growth of the country. When a group of persons or a society saves money the individual savings gets converted in to aggregate savings. The amount saved should be properly deployed to earn some income for the saver to qualify as an investment.Money kept idle does not help either the saver or the country. We will see the subtle difference between savings and investment in the days to come.

There are many avenues to keep our savings securely as also  to grow the savings.The most common and simple option which most of us use is the bank. Banks provide savings bank account,recurring deposits, fixed deposits etc..Then there are post offices where Kisangani visas patria,Public provident fund,National savings certificate etc are available.There are reputed companies who accept deposits from public,There are Government bonds..In fact the avenues are plenty.We will see them one at a time and understand their salient features so that our savings gets invested safely and also grows reasonably to beat inflation.

Now what is inflation and how does it affect your savings.

will discuss next.









During the last one year I have shared some of my thoughts about money,savings,and investments.Though I have to honestly admit that I have all along been dwelling in the basics like the inputs we receive about money,our ideas about money, accounting,children and money etc..I didnot want to go to the next level without sufficiently dealing with these basics because any attempt to build a tall building without the necessary base is always  risky.Today we see every one wants to get rich quick not bothered about the ethics,honesty and integrity.May be many of them grow very fast but if you keep watching at least some of them you will notice that all of them invariably fall from grace someday and that too fall very badly.On the other hand those who stick to the values our elders have taught us are always safe and steady and enjoy their peaceful nights.I will be happy if as readers of this blog you follow the path of truth,honesty and integrity in every aspect of your life which will bring your children also to the same path and as it continues to grow will lead to a honest India.

That said we will start from individual savings,domestic saving and its effects on the society in the next post.





Two of my friends who have been following whatever I write in magazines or social media and lately my thoughts in this blogposts have recently observed that  I have been on the runway for too long without actually taking off.They also felt that I am still dwelling on the basics without offering the real and useful ideas about money making.If I have to grow my audience and earn some thing from my blog then I have to speed things up is what they felt.

As I mentioned in one of my early posts I have started this blog  primarily to see if I am able to put down my ideas about money,savings and investments along with the ethical aspects of earning money.Also I wanted to keep things simple to encourage  people not so savvy to be encouraged to understand money  and it’s value without being influenced by biased inputs.For those who can afford there are glossy magazines, investor learning programmes,portfolio management services and many other means to grow their wealth.But for the middle class and other lower income people  the day to day life itself is a portfolio to be managed and only then comes the question of savings and then investment.It is this group which needs all the help and handholding to understand that they too can save,they too can invest and gradually improve their financial well being to lead a better life.I have taken the initial few steps in this noble cause and will be happy to proceed along steadily. The day I come to know that at least five percent of such people whom I mentioned above are my readers in this blog  I will only be really happy.Money from the blog will be a byproduct then…





Children are watching you.

We have come to the year end. A look back at what all we wanted to do in 2017 and how far we succeeded in that is imperative at this juncture.What ever important things remain to be done should be on top of The TO DO list for 2018. When we plan our progress it should be realistic and doable.If the planning process is gone through just for the sake of it then we may end up with a much bigger list at the end of 2018 also.If we have planned any bigger projects it is better to break the same into smaller tasks and involve other family members too in progressing towards the goal.

Repay all long pending dues,loans,credit cards etc. When bank loans are due and the bank representative calls on you don’t quote big defaulters…do your your debt.

your children are watching you.More than repaying the debt your actions will shape the future behavior of your child.

Keep things in order and in your control.Observe your income and expenses flow..Never ever place yourself to be a borrower..That is the most cruel injury you are inflicting on you and your family.Try to live within your means.

A very happy new year to all.





Earn while young

Whatever be the academic performance of our children it will be good if we encourage them to learn some income earning hobbies.With so much of technology and social media development today it is much easier to earn a decent amount for the teenagers and housewives.To begin with they can make imitation jewelry from materials other than gold.To day the youngsters and fashion conscious ladies prefer to wear non gold jewels as they are safer too. insurance agency is another cost free avenue suitable for housewives to look for additional income as also keep them  engaged during spare time. Philately,numismatics are very interesting hobbies which wii widen the horizon and knowledge about various countries,cultures etc at the same time a rare collection may fetch substantial profit also if sold.Technically capable persons with basic computer knowledge can start blogs,websites,uploading videos in you tube etc which will generate amazing income in the long run.Those who have the aptitude and willingness can try learning about mutual funds,stock markets etc and start investments with small amounts.Instead of traveling in the same beaten path why not try something new which will benefit us as also the family.





children and money

Whenever the parents go to the shop to purchase monthly provisions or to a retail textile show room ,to hotels for occasional eating out etc it is good to take the child also into the process of purchase.Encourage the child to total the bills before or immediately before leaving the shop.If any short totaling is found pay the difference amount to the shop owner through the child.This will instill honesty in the child at a very young age.Also if any excess amount is billed and the child finds it out encourage the child to point out the mistake and collect back the excess so charged.Once in home check if all the items as per bill are packed in to your box.Take the help of the child to arrange the items as per the bill and also telling the child about the price of atleast bigger items so that the child is aware of the value of money and your toil for the family.Educate the child to compare prices of the things he/she wants and let the child volunteer to go for an item which the family can afford.If the child still insists to go for a really costlier one make it clear that you are buying it as a onetime concession and the child may not get the same ever time..The children are as worthy as your money and handle both accordingly for a happy money life to you and later to your child.







All of us who use the internet and read blogs browse website etc..have the basic idea of what a bank is though some of us may be students,children and some housewives may not be that familiar with the banking operations.But it can be safely assumed that majority of the households in semi urba,urban and metro cities will surely have at least one bank account and may be other accounts like housing loan,car loan,credit cards etc…Each visit to a bank branch presents with many opportunities to enrich our knowledge, human relations and customer feedbacks etc..Each family should make use of these bank accounts to get maximum benefit out of it. Many a times we see heated arguments between the bank staff and customers which leaves a bad taste.Both sides should understand that they are dealing with two of the most valuable assets on earth…MAN and his MONEY(or women and her money if you like). Many of the customers do engage the services of the less educated,financially weaker people for help in their daily household of business work..may be a domestic help ,a gardener or a driver…

Those of us who employ such people should also introduce them to basic banking by helping them to open a bank account explaining them the benefits of having a bank account.This is not only a help to the individual but an indirect service to that Nation too.






Last week we saw the need for the housewife and children taking the initiative and sit with the other parent to discuss family finance.There is another very important fact which the wife mostly ignores in the name of non interference..I.e the habits of the husband which are capable of burning a hole in the pocket and in the heart as well.Yes I mean the habits of smoking and drinking. In many families the women  do not attach much importance to these two vital habits and on the other hand taken it as a  given thing for a male.Some others escape by blaming it on the family habits and  through the easy escape route. ..that the man will never listen..All these are only half truths and escapism.

No doubt the spouse should respect the individual freedom  and  should never go for micro management.But there can be no excuse in matters affecting the common interest and peace of the family.More than mutual respect the husband and wife should respect their marriage which has lot of love,respect,happiness etc attached to it.

The health hazard that these habits will pose over a period of time is immense and quite destabilizing.Also nobody can save the affected person at a later stage.

Financially too the loss is very significant.A packet of 20 cigarettes costs anywhere between Rs 110 to 130 and if a person smokes 10 packets in a month and resorts to alcohol even twice a month the family will surely suffer a minimum loss of Rs2500 in a month which cumulatively over a period could be devastating..

Families big or small …income is more or less…the first priority is to seal the holes in the pot failing which no water will in  and we will have only an empty pot soon.







As we discussed in the last post the housewife presents a typical example of insufficient financial literacy and it will be a service to the society if some sincere attempt is made in this direction.The reason that most of the housewives keep away from family finance are many. The primary reasons are

1.the male earning partner dominating and snubbing any interest shown by the  wife.

2.The wife herself is not interested much and places lot of faith in her partner’s capabilities to manage the financial affairs of the family.

3.both of them are not very educated and the survival itself is very difficult with limited income.

Though the above reasons may appear to be present in many families it does not mean  that they can allow things to continue the same way forever.Whatever be the household income and whatever be the education of the members it is very important that both the husband and wife along with the grown up child sit and discuss the family finances regularly without fail. on the salary date the family should sit together and the breadwinner should tell the family what his income is…what are his statutory deductions like provident fund etc and show the wife the balance amount credited in the bank account or hands  over as cash  to her.This will make the child understand the importance of money, as also a feel of the family conditions.Thereafter the family monthly loan liabilities,recurring expenses etc should be clearly dealt with and a permissible amount is set aside as liquid savings to be held in a bank account for meeting the contingencies.


More about banking and investment next….