Thursday, 13 September 2018

My Inflation & Balance Sheet !!!

We are all worried about the Inflation Rate of our Country. Also, about the Balance sheets of Businesses. But, have we ever thought - What is my Inflation? How is my Balance Sheet? Read on...

Dear investors & friends,

Hope you are having a wonderful time - in Personal life, Work Life & of course, Equity Markets :-)

Most of us always try to understand Businesses. We talk about Investing. Focus on Returns. But, what about our Spending Habits? What about our Balance Sheet? What about our Personal Inflation?

Our Spending Habits play a Vital Role in our Financial Independence Journey. In a world of Easy Debt, Free Credit and Fancy Products, it is very easy to drown in Unnecessary Spending. Heavy discounts, Eye catching marketing & Catchy Punchlines are highly illusive and addictive. Online Window Shopping turns into Impulsive Buys. Most of us, FALL :-)

Knowing our Spending Habits is very very Important in our journey. Spending is NOT Bad. Money is, after all, a Means to Buying anything. Some of us believe in Frugal Living while some believe in Luxury. End of day, there is no Right or Wrong. 

But... If we do not understand how our Money is moving out, we will never be able to chart a clear plan towards Financial Independence. Our Personal Balance Sheet is most Critical :-)

I had couple of interactions with my dear friends (Amit Gadre & Dhruv Girdhar) who have been contributing to the investor community immensely with their experiences. We discussed in good detail on above topic.

Here are the interactions (to listen and read).

Podcast with Amit Gadre (@Longterm_wealth)

Interaction with Dhruv Girdhar (@RichifyMeClub)

For the last 7 years, every single day, I have been noting down my expenses. Yes friends. Every single day. I do not miss a single expense. Even if I spend 21 rupees on milk, I note it down. Or a train ticket. A Pair of slippers. Or even a bunch of Spinach or some chillies :-)

Every year, the Government puts out an average Inflation percentage. I always wondered. Is that percentage relevant to us? That percentage is an average of all the industries. Is that percentage applicable to me personally?

I believe that our Personal Inflation is more Relevant. It is Key to understand how our Expenditure increases every Single Year. Are we buying things we cannot afford? Are we overspending in some segments? Are we buying things which we do not need currently? Can we learn from our spending habits?

To account for our Spending, we need to start taking Responsibilities in our family. Once we start earning, let us take that responsibility slowly from our parents. Let us personally get involved in buying groceries, vegetables, pay bills & salaries for house help. With great Responsibility comes great Understanding. And with great Understanding, comes an Independence...

Here is a link of the excel I have been using for the last 7 years.

Click here to View the Sheet


1. First Download the Excel Sheet

2. I have split expenses as:

- Fuel
- Movies/Dinners
- Groceries/Vegetables
- Mobile/Internet
- Gas
- Newspaper
- Electricity/Water
- Salaries (For household help)
- Miscellaneous (Any expenditure which is not regular)

3. Feel free to add any rows, if it is needed

4. Some information about sheet:

- Row 1 is SUM of each entry
- L4 = Misc expenses
- J1 = Regular Expenses
- K1 = Total Expenses

5. I have created sheets until March 2019 (You can create sheets yourself by Copying Sheet and Renaming)

6. I have a Graphs sheet where I have backlinked to items in each sheet. The Graph shows a Plot of how our expenses are. It also gives us an average of Spending. It gives us a good direction.

7. I have a sheet for LPG to let me know how efficiently we are using the Gas.

I hope this sheet helps you to maintain your expenses and understand yourself better. The important thing is not to use MY SHEET. It is to begin accounting in any way you are comfortable with.

Knowing OneSelf is the First Step towards Financial Independence. And a very very critical one..

So in summary:

- Knowing Our Inflation

- Knowing Our Balance Sheet
- Knowing Our Spending
- Taking Responsibilities Early

is key in our journey to Financial Independence.

Let me know if you have any queries. My best wishes...

Please leave your comments below on this topic.

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Good luck,
Fundamental Investor


  1. Thanks for this piece sir ji. Specially excel.
    This will help us identify and plug the leakages in our savings bag. Which in turn help in increasing saving rate.

  2. Appreciate your time to write about this topic.
    From past 4 months, i too have followed this methodology. But still, I'm not 100% accurate with my family spending. Indeed, its a great move to have self introspection.

    I found maintaining the sheet bit difficult. Instead, I started using one of the app named Walnut ( This app still lacks collaboration for the family members. Hoping to see it soon.

    Hope you may find it useful too.


  3. Sir,

    Thanks for sharing. This is very simple and easy to use.

    I have a query.

    L4 seems to be Regular expenses which is SUM(B1:I1)
    J1 seems to be Misc expenses which is SUM(J3:J29)

    4. Some information about sheet:
    - Row 1 is SUM of each entry
    - L4 = Misc expenses
    - J1 = Regular Expenses
    - K1 = Total Expenses

    This is correctly mapped in Graph tab. Please correct me if I am wrong.


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  5. Good information
    I am using monito application available for Android that serve the purpose same as your excel sheet and very easy to use

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  8. Thank you because you have been willing to share information with us. we will always appreciate all you have done here because I know you are very concerned with our. my balance now

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  10. I am impressed. I don't think Ive met anyone who knows as much about this subject as you do. You are truly well informed and very intelligent. You wrote something that people could understand and made the subject intriguing for everyone. Really, great blog you have got here.


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