Hey there!
If you’re earning a monthly salary and still wondering where all your money disappears by the 20th of every month—you’re not alone. Most of us weren’t taught how to manage money in school. So, let’s fix that right now.
Welcome to Personal Finance 101—your crash course on handling money smartly in India.
🧠 What is Personal Finance, Really?
Personal finance simply means how you earn, save, invest, spend, and protect your money. It’s like running your own mini company—with you as the CEO!
For salaried folks like us, it’s even more important because we have a fixed income and a ton of financial goals—rent, EMIs, vacations, kids’ education, retirement… the list goes on.
🧾 Step 1: Know Where Your Money is Going (Budgeting)
You can’t fix what you can’t see. So first, track your income and expenses.
Here’s a simple way:
| Monthly Income | ₹60,000 |
|---|---|
| Rent | ₹15,000 |
| Groceries | ₹5,000 |
| Bills/EMIs | ₹10,000 |
| Shopping | ₹5,000 |
| Investments | ₹10,000 |
| Miscellaneous | ₹15,000 |
Use budgeting apps like Walnut, Moneyfy, or even a good old Excel sheet to track everything.
💡 Pro Tip: Try the 50/30/20 rule —
- 50% for needs
- 30% for wants
- 20% for savings/investments
💰 Step 2: Build an Emergency Fund
Life throws curveballs. A sudden medical expense or job loss can shake things up.
Start small:
- Target: 3 to 6 months of expenses
- Where? Keep it in a liquid fund or savings account
- Tip: Automate ₹2,000–₹5,000/month towards it
📈 Step 3: Invest, Don’t Just Save
Your bank savings account gives ~3.5% interest. Inflation is ~6%. That means—you’re losing money every year if you’re just saving!
Start investing:
- Mutual Funds via SIPs (even ₹500/month is fine!)
- Public Provident Fund (PPF) for long-term goals
- NPS for retirement savings
And yes, don’t wait to start. The earlier, the better. Let compound interest do the heavy lifting.
🛡️ Step 4: Get Proper Insurance
Don’t mix insurance and investment.
Buy:
- Term life insurance (Not LIC endowment!)
- Health insurance (Even if your office gives you one)
This protects your family and saves you from financial ruin during emergencies.
💳 Step 5: Use Credit Cards Smartly (Not Emotionally)
Credit cards are useful if used wisely.
Pay full dues. Avoid the “minimum due” trap.
They’re not free money—they’re loans with 40% interest/year if not paid on time.
🎯 Step 6: Set Financial Goals
Start with small, realistic goals:
- Short term: Emergency fund, vacation
- Medium term: Buying a vehicle
- Long term: Retirement, children’s education
Match each goal with the right investment instrument.
🚫 Step 7: Avoid These Common Mistakes
- Living paycheck to paycheck
- Not investing early
- Relying only on EPF
- Taking unnecessary personal loans or EMIs
- Not planning for retirement until it’s too late
🧩 Wrap-Up: Build a Financial Routine
Every month, try this simple habit:
✅ Track your expenses
✅ Invest at least 20% of your income
✅ Review your goals and insurance once a year
✅ Stay informed (Read 1 finance article per week—you’ve already done that today 😉)
📌 Final Thoughts
Managing money isn’t about being rich. It’s about being in control. As a salaried employee, your biggest asset is consistency—you can build serious wealth with a plan, some discipline, and a little patience.
Start today. Even if it’s ₹500. Your future self will thank you.
Did you find this helpful?
Let me know in the comments—or share it with a friend who’s just getting started with personal finance!
✅ Up next: Tomorrow we dive into the 50/30/20 rule—your new budget buddy! Stay tuned.
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