ISSUE Want to know how your hard-earned money disappears? Just keep accounts!

Watched the Union Budget live, did you? And debated hotly if it was kind or indeed cruel, over steaming chai and chips? Well, I can't say I did, because it seemed a little superfluous to worry about the nation's spends and savings, when I have very little idea of my own.

What really happens to the money I dutifully withdraw from the ATM every week? How much do I actually spend on food and fuel every month? What about the grandiose plans to squirrel away a percentage of the family income? And more importantly, how did I get this careless about keeping accounts?

Because, it wasn't always like this; money, at one point of time, was truly sacred and was accorded a lot of respect. I remember very well, when I was little, every earning member of the family deposited their entire salaries into a wooden box, which was placed beside a diary and a pen in the almirah . When money was taken out, it was duly noted in the diary, and every night, my grandfather tallied the day's expenses. Why, we've racked our collective heads over unaccounted-for Rs. 5 or Rs. 10; today, they're simply small-change, and rounding off happens to the nearest 50.

A thing of the past?

“Keeping accounts, drawing-up a budget… they were things our parents' generation did meticulously,” says S. Deepa, chartered accountant.

“We too tried it for a month; and that month, we curtailed expenses, did not make any extravagant purchases. Our daughters were also very involved, and reported back small photo-copying bills, pens and pencils they bought; every five bucks was accounted for. My father-in-law was delighted to see the figures at the end of the month, and he complimented us on our wise spending.” But, unfortunately, the enthusiasm did not last long. “The second month, it sort of faded, and we soon gave up the habit altogether,” she says, adding that reviving it would perhaps set a good example for the children.

Keep track

“We roughly keep track of the money we spend, either writing it down or making a mental note,” says S. Lakshmi, who runs a tailoring shop. “And we try to plan our expenses, allocating tailors' salaries, electricity and telephone bills, besides taking the kids out on weekends.” But with eight members in the joint family, and somewhat unpredictable income (a spike on collection days and dip on others) her focus, she says, is on living within her means, avoiding loans at all costs. “And for that reason, I don't like credit cards; it tempts you to buy things you don't really need, especially when you don't have the money right away.”

Cash or card?

Despite kicking holes, quite effortlessly, in the most carefully-drawn budgets, card transactions have one advantage — they're far easier to track. If anything, credit card text messages tell you where you've spent your hand-earned money; and bank statements neatly give you the big (sometimes grim) picture on reams of foolscap. Octogenarian T. Visvanathan — whose grandfather inculcated the account-keeping habit in him — agrees electronic money simplifies life. “When four or five people in an household spend money, it's difficult to remember what's gone where. So, we usually note down the major expenses, and circle the figures for which we have used a card. That way, toting up later isn't terribly hard,” he says.

Businessman T.N. Ramakrishnan for his part, hands over the money to his wife, and she apportions it under various heads. But having seen some people painstakingly track every paisa, he is chary to follow their example (“it is traumatic,” he says, especially down to that fine detail).

“We maintain accounts only in very broad categories, but it still helps us rein-in when we over-shoot the budget. In general, we tend not to worry about small differences. Keeping accounts, I think, can help you plan to save money, though rising costs can sometimes leave you feeling very helpless.”

To Visvanathan, however, keeping accounts goes beyond merely keeping tabs; it checks unnecessary spends.

“Looking at the figures at the end of the month, you get a fair idea if you've spent your money well or not, especially if you tabulate it under various heads. Besides, since you can't always trust your memory, it ensures that you don't end up paying twice for the flat maintenance or newspaper man.”

Isn't money saved, as the saying goes, money earned? And on that optimistic note, I'm off to buy a wooden moneybox, to place in the almirah beside a diary and a pen. Wish me luck...


  • Catch them young. Teach kids the importance of keeping accounts and the value of money by letting them plan and budget birthday parties and gifts

  • Maintain a spreadsheet / book, note down expenses. It works like a charm, not only making you feel virtuous, but — like a dieter's diary — keeps your spends under a tight leash

  • Go online for help. Several sites offer budgeting templates. For free

  • If you've been good, reward yourself. You deserve it. And anyway, it's your money…