Note: I no longer work with IonLab since Nov 12 of 2009.

Amazon conducted a poll just before the start of the year 2009 asking people on what are their New Year Resolutions. The top two resolutions were (1) Lose Weight and (2) Get Your Finances in Order.

What is strange is that you and I would think these are solved problems, right? But yet these are the top resolutions for the new year!

We all know how to lose weight – eat less and exercise more. But it requires discipline. We all know how to get our finances in order – spend less and earn more. But it requires discipline.

Our vision for the “Track Every Coin” system that we are building is to exactly help you do this – to help you spend less, save more, and in the process help you get your personal finances in order.

So what is the problem again?

We tried out many personal finance websites and software existing in the market, and we faced the same issue again and again – they are either cumbersome or are afterthoughts.

Most of the software that we tried out did not make it easy to make entries such as expenses and made it a boring chore. And yet, this is the starting point to use all their features.

The ones that work automatically with your bank account are afterthoughts – they are good for overviews and for viewing graphs at the end of the month, but do not help in actively managing your money at all.

So we started adding in our own ideas on what we would want to use.

So what is the product?

It consists of two parts:

• The active agent where you make your entries – which is either a hardware device or a mobile phone application, based on your preference.
  • The hardware device is for those who like to have a cool-looking gadget to carry around, and want to make entries within 10 seconds.
  • The mobile phone application is for those who have GPRS connections on their mobile phones.
• The data analyzer – which is a website where you get to slice and dice your data.

I like to think of it as analogous to the “iPod-iTunes” combination – the iPod was designed to do one thing well: play music, and it left the complicated parts of managing music to the iTunes software. We intend to achieve the same effect for personal finance. This is our unique twist.

Features

At its core, the system is an expense tracking system, simply because that is the first step that every personal finance writer recommends. If you don’t know where the money is going, you won’t know how to manage it.

The logic is simple : We need data to improve, whether it is the school score cards for your kids or the mileage for your car or statistics for your favorite cricketers. We bring over the same facility to you for your money!

Now, how is this different from a spreadsheet? Well, the data collection mechanism, obviously, and lots of features, but most of all – this is a specific system that helps you with so many aspects:

1. Expenses
   • Know what you are spending on – categorize, tag and add notes to your expenditure
2. Reimbursements
   • Know how much money you have to get back from your company – save time wasted in filing expense reports
3. Income
   • Plan your money – How much money from your income is budgeted for expenditure and how much money goes to savings and goals
   • Never forget to pay your bills on time again – Reminders will be automatically be saved as expenses
4. Goals
   • Buy that thing you really want – Save money every month towards your goal, whether it is downpayment for a car or that big trip you’ve been dreaming of
5. Budgets
   • Never overspend again – Set limits on how much you want to spend and you will be reminded every time you are about to spend
6. Sharing
   • Never worry again about splitting bills – Keep running counts of expenses shared with your roommate or when you go for dinner with friends, and settle easily
7. Events and Trips
   • Know how much an occasion will cost you – Stay within your trip budget, know how much a weekend trip will cost you, know how much transportation accounts towards your trips, and more.
8. Graphs
   • Analyze where your money is going – Know if you are spending more on fuel, if you are spending too less on your hobbies, or how much money you need on an average day.

To know more, visit our website www.TrackEveryCoin.com

We aim to launch the product in July 2009. Sign up now at the website to get special offers when we launch!

We’ll be writing more about how we have designed and built TrackEveryCoin on our company blog. We look forward to your feedback either here on this blog or via email.

I have been reading personal finance-related blogs for a while now. But due to obvious reasons, it had become very important to have proper habits so that I have a healthy personal finance, and hence I started doing more research on it.

But what is personal finance? I like how Ranjan Varma puts it:

Whenever I tell acquaintances that I have a website on personal finance, the first and last question I get is, “Now, you can tell me where to INVEST”

By the time I finish saying that personal finance is not just investing and there are things like setting financial goals, budgeting,….., I get a feeling that I have lost them. They move on to another topic like the Rakhi Sawant’s latest reality show or something similarly interesting!

…

Personal Finance can be represented with a simple equation:

Income(t) – Expenses(t) = Savings(t) + Investments(t)

where time t signifies moving money, or purchasing power, backward and forward in time.

So personal finance is not just about Investing but also about maximizing your income, optimizing your expenses and your savings.

When I was looking for information with an Indian context, I was disappointed with websites like PersonalFN which are great sources of information if you already know what you’re doing, but they don’t help you to get started which is the problem in the first place!

I did find their Crorepati calculator interesting. It said that if I invest 50,000 rupees every year with a 15% interest, I’ll be a crorepati in 25 years. I realized then why compounding interest is important!:

Check this scenario out: You start investing at age 25, investing $2,000 each year until age 35. Then you STOP–never touching that money again. Your dumb friend doesn’t start until age 35, but he invests $2,000 a year for 30 years (compared to your 10). Who has more by age 65?

You! Actually, you’ll have over $70,000 more than your friend.

But 25 years seemed a long way off. Then I thought that I was asking the wrong question. The question is how to spend those 25 years well instead!

I found that most personal finance bloggers had reached the conclusion that their Goal is Financial Freedom / Financial Independence. I wanted in too.

But the aim can be different for different people. For example, your question may be When can I retire and live off my investments?

I wish colleges had taught stuff like this because it is an important life skill, especially concepts like Pay Yourself First.

The gist of what I learned are in these links:

Overall Picture

• Everything You Ever Really Needed to Know About Personal Finance on the Back of Five Business Cards
• Three Principles of Personal Finance
• 12 Steps to Financial Fitness
• Financial Planning section in the “Money Today” Indian magazine (brought to you by the ‘India Today’ people)
  • Financial Mistakes We Make
• Financial Planning reading list

Habits

• Monday is Money Day / Weekly Routine
• Personal Financial infrastructure – Once you have a system set up, it’s very easy
• Invest in index funds ( howto )
• Build an emergency fund / Ways and Means fund
• I think there is a lot more here that I haven’t come across yet.

So, how do I start?

Read the Financial Literacy month articles at the Get Rich Slowly blog, especially:

• 9 Methods for Mastering Your Money in 2009
• The Balanced Money Formula

If you think all this is not important, then I’ll mention that Google has a section called Google TipJar where people share money saving tips. If Google is into it, it must be important, right?

I’m personally looking forward to Ranjan Varma’s upcoming workshop where he mentions these topics:

• What is Personal Finance?
• Overview of Financial Products.
• Financial Goals.
• Magic of Compounding.
• Rupee Cost Averaging.
• Playing with Numbers.
• Conscious Spending Plan.
• Insurance Cover
• Mutual Funds/ETF
• Stocks
• Real Estate Planning
• Credit Cards
• Documentation/Legal Aspects(Wills)/
• Planning for your Children
• Retirement Planning
• Scheduling a Money Day
• Tax Planning

There are just so many aspects! And it just surprises me that money being such a life-enabler, I neglected it for so long.

What is your ideal personal finance life? How are you achieving it?