A Section 8 (Not for Profit) Company


Income, Expenses and Budgeting

Are you sometimes short of cash at the end of the month? Don’t seem to be able to save for the things you really want?

You can learn to balance your income with your expenses —and even have some money left over for savings and extras. Let us show you how to manage your incoming and outgoing finances.

Setting Prioroties: Needs and Wants

It is very important to know the difference between your needs and your wants. This will help you in setting your priorities so that you know where to spend your money.

1.Need: A necessity, something required, something essential for life

2.Want: A desire, something wished for, something non-essential

Using these definitions, ”a roof over my head” is a need. So are clothing, food, tools for work and medications. ”Watching movies in theatre” is a want, and so are addictions like chewing paan, smoking and drinking.


Most of us have a source of income through our job, business, farming or any other work. Many may also be receiving interest income from their investments.

Whatever be the sources of income, you need to know how to keep track of it and manage it to cover your expenses and save for future.


It costs money to live. You need to pay for food, clothing, housing, transportation, communication, and a dozen other necessary expenses. Then there are things like vacations, entertainment, children’s education and marriage, gifts for relatives and so on. If you want to reach your goals, there are two things you must do with your expenses:

The first step in controlling your spending is to get in the habit of tracking your daily expenses so you know how much you spend and what you spend it on.


Now that you know your income and expenses, you need to put them together and that is called a budget. There’s nothing difficult about a budget. It is simply a comparison of income and expenses.

Is the difference between your total income and total expenses a positive or a negative figure?

If it is positive, you have a surplus. Congratulations! With the extra money you must pay off any debt or loan if you have. Otherwise you can increase your monthly savings amount or invest for future.

If it is negative, you have a deficit. You need to make changes to balance your budget. Reduce your expenses by focusing on what are your needs rather than wants.

Budgeting isn’t a one-time thing. To make it work, you need to do it regularly. At first, do this weekly and once you are comfortable you can do it monthly.

Financial goals

If you want to go somewhere, you need to know the road. It’s the same with your money. To manage your money well, you need to know where you want to go.

It’s important to set short, medium and long-term financial goals


Without savings, when you want to purchase something, you have to borrow money. Borrowing is expensive, because not only do you have to pay it back, you also pay interest, often at a high monthly rate. Saving lets you avoid the interest you have to pay to borrow money. Most people know the reasons to save - but many don’t do it consistently. Save now.

How to save?

Now that you’ve decided you want to save, how doyou go about it? Keep these tips in mind:

Saving is a key step to make sure your future is financially secure. Start early to give your savings as much time as possible to grow.

Where to save?

Where to save?

You know you can save at least a little every month. What should you do with your savings to keep them safe? There are many options. It can be as simple as a savings account at a bank. It can be recurring or fixed deposits, or post office savings schemes.

Each type of Savings vehicle has costs and limitations. Check them carefully to be sure you understand the terms and whether they provide what you need.

What is BC? How does a BC function?

Banks have been allowed to appoint local individual persons and others as BC to work as agents of the banks. The BC uses Information and Communication Technology (ICT) based devices such as handheld machines, smartcard based devices, mobile phones, etc. to carry out the banking transactions.

Whether our money is safe if we deposit with BC?

BC is a mode of providing banking service at our doorstep as bank branch is far off from our area. Depositing our money with BC is as good as depositing with a bank branch. The transactions are done through the ICT based devices and accounted in the books of the banks. The customers get immediate verification of their transactions as cash deposited/withdrawn by customers through the BC is acknowledged by issue of a receipt on behalf of the bank. Additionally, transactions through BCs are done on the basis of our biometrics or a PIN number and thus no one else can do the transactions in our account.

What are the services provided through BCs?

BCs will provide the facility of saving deposit accounts with inbuilt overdraft, fixed deposit and recurring deposits. They will also allow remittance of funds from our accounts and receipt of funds into our account. Besides, they will provide credit for income generating activities through Kisan Credit Cards for farming activities and General Credit Card for non-farm based activities.

Credit and Debt Management

Many people need to borrow money for buying a house, car or children’s education. This is called credit. Borrowing money is neither good nor bad. But financial experts often distinguish between good debt and bad debt. Good debt is an investment in something that creates value or produces more wealth in the long run. Examples: loan to buy a house or education loan for your kids to pursue higher education. Bad debt is debt taken to buy something that immediately goes down in value or to buy something that you can’t repay on time. Example: loan to buy a big size television or loan to pay your monthly expenses.

It’s easy to spend without realizing how the debts are piling up. Sometimes, despite your best efforts, you find yourself with more debt than you can handle.

Although it may seem impossible, you can get out of debt. The first step in solving your financial problems is to admit that you have them and take control before they get out of hand.

Suppose you want to buy something and you don’t have money. The phone rings or you receive an email, offering to get you a loan. Don’t fall for such pitches. Make a plan to save up enough money so that you can buy what you want.

Why Borrow within limit?


No one plans to get in an accident or become seriously ill. The chances of these things happening to you may be very small. So we may put off buying the insurance we need. But these things do happen. It’s only when the event occurs that we realize that we may not be as well protected as we would wish. Insurance is a way to protect yourself and your loved ones from financial hardship in case losses occur.

Life Insurance

Life insurance provides a financial payment to your beneficiary upon your death. When you buy a life insurance policy, you name a beneficiary.

It is generally recommended to purchase an insurance with coverage worth 7 to 10 times your annual income in order to protect your family.

Vehicle Insurance

Auto or vehicle insurance is mandatory if you own a vehicle. Depending on your policy, it covers losses that your vehicle causes to other people and of your own medical expenses if you have met with an accident. It also covers the cost of repairing or replacing your vehicle due to other types of damage or loss, such as vandalism, fire or theft.

Health Insurance

In the recent past the cost of treatment has increased many folds. A simple visit to a doctor now costs anywhere between 300 to 3000 rupees, depending on where you live. If your treatment requires you to stay in the hospital for few days, you will end up with a huge medical bill that can severely impact your savings. To avoid such financial shocks, we must insure ourselves. Every insurance company offers a medical insurance plan that covers basic medical care, including doctor visits and costs of hospitalization.

Making a claim

A disaster happens. Your bike is stolen. You have met with an accident. It’s time to make a claim. When you make a claim, you are officially asking the insurance company to pay you for the loss you have suffered under the terms of your insurance policy.

Contact your insurance broker, agent or company as soon as possible. Because most companies have time limits within which you must submit your claim. Also remember to provide all supporting documents needed when submitting your claim.


Investing can be complex and it often has risks. But with knowledge, you can choose the level of complexity and risk that you are comfortable with.

Key factors

Investing Goals

What you want from your investments depends on who you are. Your investment goals will be different from those of other people, and they will change as you go through your life. Usually, you have a variety of goals at the same time. You may be looking for long-term growth in value and also want a secure and flexible fund for emergencies. Each household will have a variety of objectives, and will need a different investment strategy for each one.

One easy way to see how personal factors affect investment choices is to think about your life stage, the phase of your life that you are in.


Equity is a part of a company, also known as stock or share. When you buy shares of a company, you basically own a part of that company and can expect to profit when the company profits. These shares are traded on stock exchanges which facilitate the buying and selling of stocks, thus providing a marketplace.

Investing in equities is riskier and definitely demands more time than other investments. For beginners, it’s better to invest in the share market via mutual funds which are professionally managed and is less costly.

Mutual Funds

A mutual fund pools money from many investors and invests in stocks, bonds, short-term money-market instruments, other securities or assets, or some combination of these investments. The combined holdings the mutual fund owns are known as its portfolio. Each unit represents an investor’s proportionate ownership of the fund’s holdings and the income those holdings generate. Buying a mutual fund unit is simple and easy since these are sold by many banks and the minimum investment amount is small.

Before investing, it’s important to remember that if an offer is too good to be true, it probably is. Also be sure that the product or company you are investing in is a registered entity engaged in legitimate business.

Why Invest?

Retirement and Pensions

After a full and productive working life, you look forward to a healthy, active and secure retirement. Whether you retire early or work well into your senior years, you want to know that you will be financially secure in your later life. Will you have enough money for your retirement?

If you’re like most Indians, your younger and middle years are filled with numerous demands on your time and finances: raising children, buying and maintaining a home, enjoying festivities. You may be too busy to think about retirement, or you may find it hard to put money aside now for later.

Retirement needs

It is important to know how much money you will need for retirement. It can vary with your individual circumstances. Life expectancy, inflation and your retirement age are some of the key factors to be taken into consideration while calculating your retirement needs.

Inflation is the rising cost of consumer goods and services. It affects your retirement needs in two ways. First the cost of goods that you buy increases which means for buying the same amount of good you need to pay more. Second, due to inflation your retirement savings also lose value. All this must be taken into account when you are creating your retirement fund.

National Pension System

The national pension system is a pension plan by the Government of India to provide financial security and stability during old age when people don’t have a regular source of income. It is open to all citizens of the country between the ages of 18 and 60 on a voluntary basis. You can subscribe to NPS through which you will be able to save and invest systematically during your working life. A minimum saving of 500 rupees per year is required to subscribe to the scheme. When you retire, normally at age 60, you will get a part of your money and the remaining can be withdrawn on monthly basis. Your savings in NPS, up to a certain limit are also tax exempted.

When it comes to thinking about your retirement, do you plan ahead? Or do you tend to put it off? One thing is clear; to ensure that you have enough to meet your retirement needs, it’s essential to start planning early - at the beginning of your working life. It is important to start saving regularly, even if it’s just a small amount every month.

Financial Planning

Many of us think that financial planning is only about investing for retirement. It is - but it’s also so much more. Whether you’re a college graduate, a young person, a housewife or a senior person, financial planning is how you think ahead to make sure you achieve your goals. Your goal may be to get out of debt, to balance your budget or to retire in style and comfort, without a plan all you have to rely on is good luck. People who are well prepared usually have better luck. Planning means that you try to choose the future you want instead of falling into a future you did not choose. Also, if you have a plan you can adjust it when changes occur in your life. Because you know you are taking steps to manage your future, you will save more and worry less.

Government schemes

Pradhan Mantri Jan Dhan Yojana - PMJDY

Opening a bank account under PMJDY is simple and easy. It also offers a lot of benefits. Have you already opened? If no, visit a nearest bank branch or business correspondent (bank mitr) centre today and open your account. You do not need any money to open an account. However, if you want a cheque book you will need to fulfill the minimum balance criteria of the bank. To open this account all you need is your Aadhaar card. If you do not have an Aadhaar card you need any one of the followings documents: Voter ID, NAREGA card, Driving license, PAN card and Passport. If you do not have any of these documents, you still can open your account. Go to a gazette officer and have a letter issued with your name, address and photograph in it. Remember you do not have to pay any money to open this account.

When you open the account, you will be given a free RuPay debit card. This card can be used to withdraw money from your account at ATMs or can be used to make payments for purchases at stores and online. This card must be used by you at least once in 45 days; otherwise you will not get many other free benefits of the scheme. If you successfully operate the account for 6 months, you would be eligible for an overdraft facility i.e. you can borrow 10000 rupees from the bank. And if you pay back the bank in time, you would be eligible to borrow 15000 rupees next time. By this you will be saved from all the problems of borrowing money from the local money lender and paying him an exorbitant interest. As you open this account you are also going to get a life insurance cover of 30000 rupees and accidental insurance cover of 2 lacs rupees, all for free.

By having a bank account you can now transfer money easily across the country. Also, any other kind of government benefits such as old age pension or LPG subsidies will be directly given in your bank account. Having this account will also give you access to various other insurance and pension products.

If you know someone who does not have a bank account, encourage him/her to open an account under the PMJDY and receive all the benefits at free of cost.

Pradhan Mantri Suraksha Bima Yojana - PMSBY

People who have a bank account can avail the benefit of this scheme. If you still do not have a bank account, go and open an account under PMJDY. As you read in the previous section you do not need any money for this. It is also very simple and easy. All you need is your Aadhaar card to open this account.

Once you have a bank account, and you are in the age group of 18 to 70, under the PMSBY you can get an accidental insurance cover of 2 lakh rupees by paying just 12 rupees per year. This will be automatically debited from your bank account once a year when you join the scheme. After joining the PMSBY if the policy holder meets with an accident amounting to death or disability, you or your family members will receive an amount up to 2 lakh rupees as benefit.

Re member to join this scheme you need to have a back account and agree to pay 12 rupees per year which will be auto debited from your account. So go to your bank branch and avail this scheme today.

Pradhan Mantri Jeevan Jyoti Bima Yojana - PMJJBY

If you have a bank account and you are in the age group of 18 to 50 years you can join this scheme

under which you will be given a life insurance cover of 2 lakh rupees by paying just 330 rupees per year. Like the PMSBY, to join this scheme you have visit your bank branch and agree to pay 330 rupees which will be auto debited from your bank account. After joining the scheme if the policy holder dies due to any reason, his/her family members will receive an amount of 2 lakh rupees.

If you are the sole bread earner in your family, have you though what will they do if something happen to you? By joining this scheme you can ensure that they will receive 2 lakh rupees which will not take away their pain but can help them great deal. Ask your friends and if they have not yet, ask them to join PMJJBY.

Atal Pension Yojana - APY

As the name suggests, it is a pension scheme under the National pension System or NPS. Any one between the ages 18 to 40 years can join APY and will receive a guaranteed minimum pension of 1000 to 5000 rupees per month at the age of 60 years. Not only this, if you decide to join APY before 31st December 2015, the Govt. of India will also co-contribute 50% of total contribution or 1000 rupees per year for a period of 5 years.

To join APY you need to have a bank account. Do you see, how having a bank account can give you

so many benefits? Open a bank account now and also ask others to do the same.

If you join the scheme early, say at the age of 18 years, you will need to pay only 42 rupees every month and when you become 60 years old; you will receive a guaranteed pension of 1000 rupees every month. To join this scheme visit your bank branch or the nearest banking correspondent (bank mitr) centre. When you join the APY, you are making sure that when old age comes you are prepared for it. You do not have to depend on your children for everything as you will receive your own pension money each month. It is important to remember that if you join the scheme early you will need to pay less every month than if you join late. So stop waiting, go to your nearest bank branch today and ask them to join APY.

Fraud Protection

Financial fraud or scam is a growing problem in today’s world. Every year we hear new stories about people losing all their money by investing in illegal schemes. But this has not stopped others from falling prey to these schemes. This is because criminals are very creative and they keep changing their tactics to find new victims. You can keep your money safe by being aware of these risks. Do you know someone who is a victim?

The first step in protecting yourself against fraud or scam is knowing what it is and how to recognize various types of fraud or scam.

Types of Fraud or Scam

Fraudsters and scamsters target people in a variety of ways: through email and on the telephone, when victims are making investments or by stealing personal information.



If you experience any of these red flags, do not participate in the investment. Inform the appropriate authorities and also tell your family and friends about the attempted fraud and warn them to be careful.


ATM (Automated Teller Machine)

Automated Teller Machine provides the customers of banks the facility of ac-cessing their account for financial & non-financial transactions without the need to actually visit their bank branch. Customers should observe following Do’s and Don’ts to keep their transaction safe and secure at ATMs:

Grievance Redressal