Do We Really Need A Money Management Software?

Posted on June 13, 2010 by Ranjan

Balancing our checkbook and listing out our investments in a notebook (In MS Excel these days) is all we need to be doing about money management. No?

Most of us would not bother about setting up a detailed system that tracks our expenses, optimizes our income and tracks our savings and investment.

But there are several downsides for not maintaining any records or just maintaining a manual notebook for all your financial transactions.

Notebook records don’t give you the options of retrieval of data in any desired format other than the one you are using. For example, a list of fixed deposits will not give you another list which is sorted in a way that shows in an order when you will get the redemption or maturity of those FDs.

Excel is a powerful spreadsheet and can be used by trained users in a very effective way. But the caveat here is that you need to be a trained user to make use of the spreadsheet software. Even with trained users, getting reports in charts, tables, etc will not be easy.

Record keeping is a simple, easily implemented, and cost effective management tool. Complete, well organized records can help ensure proper management of your money.

But it is also important to be aware of the limitations of good record keeping. We need to take care of the following:

Records must be updated regularly.

You must update records correctly.

The records need to be readily accessible.

Records containing any confidential information must be secured.

I believe that available technology can help create a strong system to manage your money. But they also need to be easy to use. It should not be like a Jet’s dashboard which has hundreds of powerful utilities and features but very complicated to understand.

There are some desktop softwares that are coming to the market and promise loads of features.

An option that is growing in popularity is software that is kept entirely online. You never actually download a program to your computer and can access your information from any computer connected to the Internet, including SmartPhones.

This is referred to as “cloud computing.” Some websites offer a low monthly fee to use the software and other sites are free and entirely advertising supported. Some people prefer this method for its convenience and other people stay away from these programs due to security fears.

Once you begin to use personal finance software you’ll wonder how you ever managed your finances without it. I believe that people might become addicted to seeing the computer generated reports of exactly where their money goes each month. They should find this makes it easier to create a budget and stick to it.

That’s the premise that I am working on right now. Do you have thoughts on using software to manage your money. I’m listening.

Coming Soon! RupeeCamp "Financial Planning Workshop". "Join us"

Welcome back! Join me on this journey to improving our financial IQ and sharing what we know. Updates at RSS feed or Email. And spread the word please Thank You!

Share/Save

Coming Soon! Rupee Manager Workshops Near You

Posted on September 12, 2009 by Ranjan

This is the 10 slide deck introducing the Rupee Manager Workshop that I am planning. Would be delighted to see your comments.

Rupee Management Workshop

View more presentations from Ranjan Varma.

Transcript for two slides:
# Problem

* Huge Information Asymmetry in Financial Services

* Uninformed Financial Decisions by Educated people

* No Measurement tool to guide the management of Money

* Lack of authoritative resources & books in the Indian context

* Information overload on the Internet

# Solution

* Workshops

o at Corporates, Facilitate one-to-one Financial Planning to employees at Corporates.

* RupeeManager software :A desktop s/w where you can Measure, Manage & Make your Money Work.

* E-learning follow up module

* Online/Offline (E-books) Aggregation of Resources on personal finance

* Financial Services Only term assurance, select Mutual Funds and Stocks

What do you have to say about this workshop? Would you like to attend?

Share/Save

RupeeManager: Assign work for your Money

Posted on September 2, 2009 by Ranjan

Managing Money is the second of the top two New Year resolutions. (Via Swaroop’s TrackEveryCoin) The top one is, of course, losing weight. The fact that we need those resolutions every New Year, makes it obvious that we don’t keep those resolutions for long!

The reason we are not good with managing our money is not hard to find. Fear of numbers, information overload in the media, financial jargons and the complexity of financial products adds to our inertia.

But the biggest reason, to my mind, why people do not manage their money is that they don’t know anything about their money. How it is coming, where it is going, whether it is lying idle, etc.

That brings me to the RupeeManager software that we are building.

The three guiding principles that have helped conceptualize the software are
1. Measure: (Know Yourself)
2. Manage: (Know how your money is doing)
3. Make Your Rupee Work: (And not just You working for Money!)

1. Measure: It is common knowledge that whenever you need to manage something, you need to measure it first. We have a vague idea about our money.

Like, have you figured out your risk profile/appetite?

The idea is that, if we had a way to measure income, expenses, portfolio, risk profile, etc, we could have a discussion on how to improve them. No records, no improvements.

The RupeeManager is primarily aimed at helping you measure your rupee. Once you are aware, other things follow.

2. Manage: Now that you have numbers ready, the improvements follow naturally. For example, you see that your percentage spend on “eating out” is 2-3 times the monthly grocery bill or it forms 25+% of your expenses.

Also, you will get an idea how to balance your portfolio according to your risk profile. You will match the portfolio with your risk appetite and see if you can take more risk or go more conservative. In other words, you get to decide your asset allocation strategy.

3. Make your Money Work: Other than tracking your earnings and your expenses, it is important to see if your money is working for your future.

We have a feature where you can allocate your income among fixed expenses, discretionary expenses, short term savings and long term investments. It’s like assigning goals for your money.

I have my fingers crossed on the response we’ll get on the software. Would you like to participate in the private beat of the software? Let me know. Thanks

Share/Save

Introducing India’s Online Insurance Community

Posted on August 27, 2009 by Ranjan

BimaWorld is a new online Insurance Community in India. They have useful articles and discussions happening online.

Btw, they also picked me as the winner of the “Question of the month” contest. (Vanity strikes!)

I asked Devanand Agarwal, the Cofounder, Bimaworld about how he’s going to build this community. Here’s the questions and his answers:

Q. 1. a) What prompted you to start your website?

Information is the key to make a wise decision. Websites are very handy in spreading the information. Also masses are not yet conscious about insurance. Like any other subject, insurance need to be talked about, discussed & debated, and website can be a very ideal platform for this. Also absence of an advisor cum expert agent, lack of flow of correct information, wrong selling of policies, poor after-sales service and No-claim Assistance promoted us to start our website.

Q. 1. b) What motivates you to keep on going?

Positive responses from insurance seeking community and insurance industry professionals who are not internet savvy but have years of experience in insurance. They have shown willingness to join bimaworld and help community. Soon we will launch a special expert consultancy section where anyone can communicate with our panel of elite members. Kolkata Blogger’s Meet Aug’2009 was very motivating and reaffirmed us that the decision to start an online community was right. Seeing our website taking practical shape and our teammates filled with innovative thoughts, dedication energizes us to continue further.

Q. 2. Why is it that, generally people avoid or have a fear of financial planning?

Liquidity Crunch, Small Savings, Irregular income, Lack of Knowledge, numerous products to choose, Inability to figure-out phases and needs for life that may arise in future, Insecurity of parting liquidity- Stories of Cheat fund Companies, no- corrective measures from Government agencies, judicial delay and Limitations thereto.

Q. 2. b) What is the fundamental problem?

Lack of knowledge, inability to figure-out phases and needs for future are basic issues.

Q. 3. The aim of your site is to help people make an informed decision about their insurance. But the present information asymmetry between buyers and sellers is huge. Do you see the internet making an impact on reducing the information gap?

Yes, to a large extent.

Information on net are numerous and available in text, blogs, forums, graphic, article, videos forms, the users are also getting more and more friendly to these modes. But explanation in simpler terms and its complete understanding is still a concern for all, alike approachability and shortage of time; which we will make easy and happen for the masses.

Q. 4. What role do you see for offline seminars and workshops rather than online education?

Motive of both Online and Offline system is to sell across the message “to the point”.

Online is getting personalized and also picking-up its momentum but offline workshops and seminars are more powerful & very much acceptable to the masses, a lot of live interaction takes place and thousands of unknown questions are answered at a time.

Q. 5. How would you advise? To have one personal finance consultant who maintains your money or have an insurance consultant, Mutual Fund advisor, Stock Broker separately?

A Personal Financial Advisor can be said “Jack of all but Master of none”, who can give an overall suggestion on investment pattern and help in choosing plans.

But like others, he would be having his limitations depending upon his capabilities, skills and understanding. Separate consultants like insurance consultant would be more advisable because of their specialization with compulsion to answer comparative views on other financial products.

Moreover claims handling, policy servicing and suggesting skills are the areas which gives an edge to the insurance consultant over a personal financial advisor, 90 times out of 100.

Q. 6. Do you visualize a growing use of personal finance software to track and manage money in India?

Yes, people in India are trying to have a system to track their business, money, investment, budgeting pattern etc. further MIS reports are getting more popular among individuals alike Corporate investors.

Q. 7. The Regulators are cracking the whip on Asset Management Companies and Insurers. What’s your wish list from the IRDA?

It is an important job and duty of the regulatory body to perform.

The concern is that for public money, which for all times should be protected.

But they (Regulatory) have their own limitations apart from the political and judicial system being very slow in implementing its decisions and setting an example before all. Wish list –IRDA- none this time

Share/Save

Three Principles of Personal Finance Management

Posted on August 4, 2009 by Ranjan

Talking about Personal Finance is a constant struggle for me. I don’t want to sound like a preachy expert. I don’t want to be appearing to impress by using jargons and numbers. And I wouldn’t like to spoon feed people.

But I do want to share what I know and hope that people take care of their own personal finances.

I do not know if I am failing or succeeding. And I don’t care. It’s the journey that interests me.

Along this journey of talking about personal finance, I have realized that it’s better to show rather than just tell. Also, more than any theory, there is a need for a tool in our hands that can help us manage our money.

That tool should be easy to use and give us necessary data/metrics so that we can improve our money management further.

That brings me to the three guiding principles that have helped me conceptualize the software. (Check out RupeeManager, being launched in September, 2009)

The three principles of money management are (I call it the Three M Principle…..mmm):

1. Measure: (Know Yourself)

2. Manage: (Know how your money is doing)

3. Make Your Rupee Work: (And not just You working for Money!)

1. Measure: It’s common knowledge that whenever you need to manage something, you need to measure it first. I was talking to my sister the other day and she told me she knew how to handle her money. (She was polite and didn’t tell me that she doesn’t need a blog to tell her how! And she’s right). She said, “just spend less than what you earn, and everything is fine”.

“Brilliant”, I said. But, to my questions about the numbers that proved that she was on track, she drew a blank. If she had numbers on what percentage of the earnings go into what categories of expenses, we might have had a discussion on how to improve upon that. If she had figured out her risk profile/appetite, we could had a discussion on whether her investments match that or not.

In other words, if we had a way to measure income, expenses, portfolio, risk profile, etc, we could have a discussion on how to improve them. No records, no improvements. Or perhaps, ignorance is bliss!

The RupeeManager is primarily aimed at helping you measure your rupee. Once you are aware, other things follow.

2. Manage: Now that you have numbers ready, the improvements follow naturally. For example, you see that your percentage spend on “eating out” is 2-3 times the monthly grocery bill or it forms 25+% of your expenses.

It’s perfectly okay if “eating out” is high on your agenda. But if the figures scream at you, you would think twice before rushing out for another “eat out”.

3. Make your Money Work: Other than tracking your earnings and your expenses, it is important to see if your money is working for your future.

We are adding a feature where you can customize your spending plan between fixed expenses, discretionary expenses, short term savings and long term investments. It’s like assigning goals for your money. (Sehwag, go and batter them into pulp. Dravid, stick around till the end. Dhoni, Yuvraj, finish it off. Etc, etc. )

The software that we are building will be based on these three principles of money management. So that’s what “RupeeManager” will be all about.

Do you have any suggestions? We’re listening.

Share/Save

Telling v/s Showing

Posted on March 9, 2009 by Ranjan

The target audience for this post is me alone. This is to record my thoughts about being a better blogger. So it’s okay for you to skip this one.

I have come to understand the futility of “telling” something to readers. It sounds preachy. Good in theory, but ain’t practical.

Like the one I read on a billboard today: “Let us strive to make tomorrow better than today”.

Does it make an impact on you and me? Not really, because it’s “telling” me to do something rather than “showing” me what to do!

“Telling” is like saying: “Take my advice. I don’t use it anyway”.

I think there can be a better way. Instead of the preachy “do’s” & “don’ts” of personal finance, there could be a way to “show” the way to manage your money.

How? That’s a million dollar question that I have to struggle with.

Example: Instead of talking about the benefits of budgeting (theory and preachy part), I can show you the “Personal Finance Tracker”. See this screen shot below:

Personal Finance Tracker: Budget Chart

Hey, I told you this post is for me trying to show myself to write better. Now that you’ve come thus far, let me know if you think I’m on the right track.

Thanks! I promise I’ll get better and better

Btw, if you want to try out the tracker application, you can download it for free from Zoho Creator’s Marketplace. It’s featured right on the top!!

Share/Save

Personal Finance Tracker

Posted on March 8, 2009 by Ranjan

Technology excites me with the way it helps us to do something in a better way. Technology fascinates me when it solves problems, big or small.

So, perhaps, this fascination has helped me build the following tracker application. I do not have any technical qualifications and it’s difficult to teach an old dog new tricks. But as they say learning never stops and if you’re keyed on to something, you figure out how to handle it.

Zoho Creator has featured the application on their marketplace and that has given me the courage to write it on my own blog. And also the 400+ downloads along with encouraging comments about the clean and simple interface.

To manage anything, it is recommended that you measure it first. So when we talk about personal finance, the “Do’s” & “Don’ts” do not really register with most of us. The key is to “Get started” on managing your money.

So if you and I are serious about personal finance, there should be a way to track what is happening to this important resource.

Personal Finance Tracker is an easy and simple way to track your personal finance. You can measure and track your income and expenses, create your portfolio of your Investments, create alerts/reminders and go to your choicest financial calculators.

Personal Finance Tracker on Zoho Creator

You can also see pictorial representations of your budget, investments and expenses. You can filter them for what you need to analyse.

Expense Chart

You can further filter the chart on the basis of the category of expense, whom spent for, payment method, etc.

Similarly for the income chart, you can filter it out on the basis of various sources of income. You can see a pie chart for your budget categories as well as your expenses.

There’s calendar view of your alerts and reminders too.

Personal Finance Tracker: Calendar for Alerts

You can filter the calendar on the high, medium or low criticality of the alerts and the months of the alerts too.

And btw, if you think that only a techie/programmer can build all this, let me confirm that it’s been done by me alone. But it wouldn’t have been possible without the amazing Zoho Creator. It’s really friendly and intuitive and you can build a complete web application even when you are not a techie. Even techies can use the interface to build more complex applications, I’m sure.

Do try out the Free install of Personal Finance Tracker at Zoho’s Marketplace . Let me know what you think

Share/Save