Skip to main content

Financial Planning for new Salary Earners

You have just got a job but you are clueless as to how to manage your money. You either spend your entire disposable income or let your savings sit on the credit side of your saving account. Either way, you are not doing the right thing.

Managing money can be an overwhelming process especially when you have just started earning. You are a millennial and still celebrating the fact that you are able to afford your rent, utilities and other expenses on your own. However, if terms like savings, investment, personal finance and money management are making you anxious, then try to understand these points:

1) Setting a monthly budget

Big organisations run on the simple principle of budgeting. The marketing department sets a campaign budget; the product department sets a research and development budget. Similarly, we set a budget before we think of making a big purchase. The same concept applies to our monthly expenditure as well. Write down your income and expenses. Try to limit the expenses by up to 60% of your income by budgeting the same. It can be done once you track, list, categorise and prioritise your expenses. Create your budget revolving around your lifestyle. Don't try to copy someone else's spending habit. Setting a budget in conformity with your expense can give you a lot of clarity and control. Also, the budget should not be so restrictive that living becomes a punishment.


2) Build a habit of consistent saving

The budget set shall help you to reach at a definite income-expense ratio after several attempts of trial and error. You may find yourself succumbing to temptations courtesy brilliantly curated advertisements. Don't worry. Keep aside a definite buffer sum for your crave-purchases. After adjusting various expenses for the first few months, slowly include savings into your budget. If you find savings difficult, then think long-term. Would you rather want a trip to Rome or fifty days of fine wine and dine? Learning to live within the means can be difficult in the present times but, your money-hygiene is just as important a discipline as your work-out regime. Financial planners suggest avoiding debt by keeping a check on credit card usage. Set short-term and long-term financial goals.


3) Leave room for some flexibility

At the start of your career, you may change jobs and cities. Make a flexible plan. Avoid committing to a long-term payment cycle like home loan if your work life and goals change frequently. Also, tying your savings into long-term products may not work if your goals change and you need funds immediately. Your investment plan shall also move like your savings plan. Park your investments in instruments which give you a lock-in which is similar to your financial goals. For example, if you are planning to get married in 3 years, then invest your money in an instrument with a 3-year lock-in.

4) Allocate towards an emergency fund

To hedge yourself against uncertainties, it is essential to build an emergency fund before assigning a chunk towards investment or savings. You have just started your career and you may get hit money-wise when you are exploring your options. Hence, an emergency fund can come to the rescue to give you some buffer time. Treat this fund as a cushion in order to remain debt free and review this fund from time to time.


5) Start investing your saved money

Investment is a term which is Mariana Trench deep. There are many products on the market you may not be aware of. Start simple. Focus on tax-efficient investment products like equity-linked saving scheme funds, provident funds and dividend incomes. Keep a certain amount aside dedicating to your retirement fund. Before splurging on couture think about getting a health and vehicle insurance. The investment options should be based on your financial situations. Putting all your money in equity in a stock exchange can prove to be financially fatal if you don't have enough margin of safety to fall back on. While you can postpone life insurance for a while but, you shall cover yourself with a health insurance if you are self-employed.

6) Maintain a sound credit history

Banks may decline your loan petition in future if you have demonstrated a bad behaviour in repaying debts. Pay your bills on time. A good credit profile is useful later in life when you wish to borrow funds. Just like your country, you are also rated on your financial credibility.




SIPs are Best Investments as Stock Market s are move up and down. Volatile is your best friend in making Money and creating enormous Wealth, If you have patience and long term Investing orientation. Invest in Best SIP Mutual Funds and get good returns over a period of time. Know which are the Top SIP Funds to Invest Save Tax Get Rich - Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

Popular posts from this blog

Birla SunLife Manufacturing Equity Fund

The Make in India program was launched by Prime Minister Naredra Modi in September 2014 as part of a wider set of nation-building initiatives. It was devised to transform India into a global design and manufacturing hub. The primary motive of the campaign is to encourage multinational as well domestic companies to manufacture their products in India. This would create more job opportunities, bring high-quality standards and attract capital along with technological investment to bring more foreign direct investment (FDI) in the country.   Why India as the next manufacturing destination?   The rising demand in India along with the multinational's desire to diversify their production to include low-cost plants in countries other than China, can help India's manufacturing sector to grow and create millions of jobs. In the words of our Honourable Prime Minister- Mr. Narendra Modi, India offers the 3 'Ds' for business to thrive— democracy,...

Kisan Vikas Patra - KVP

  Kisan Vikas Patra (KVP) First launched in 1988, the Kisan Vikas Patra (KVP) is one of the premier and popular saving scheme offering from the Indian Postal Department. This product has had a very chequered history- initially successful, deemed a product that could be misused and thus terminated in 2011, followed by a triumphant return to prominence and popular consumption in 2014. The salient features of KVP are as follows- The grand USP- Money invested by the applicant doubles in 100 months (8 years, 4 months). KVPs are available in the following denominations- Rs.1000, Rs.5000, Rs.10,000 and Rs.50,000. The minimum purchase value for the KVP is Rs.1000. There is no maximum limit. KVPs are available at all departmental post offices across India. These certificates can be prematurely encashed after 2 ½ years from the point of issue. KVPs can be transferred from one individual to another and from one post office to another. ----------------------------------------------------- Inve...

Mutual Fund Review: Reliance Regular Savings Equity

    Despite high churn, Reliance Regular Savings Equity has managed to fetch good returns   In its short history, this one has made its mark. Though its annual and trailing returns are amazing, the fund started off on a lousy note (last two quarters of 2005). It managed to impress in 2006 and was turning out to be pretty average in 2007, till Omprakash Kuckian took over in November 2007 and wasted no time in changing the complexion of the portfolio. Exposure to Construction shot up to 28 per cent with almost 21 per cent cornered by Pratibha Industries and Madhucon Projects . Exposure to Engineering was yanked up (18.50%) while Financial Services lost its prime slot (dropped to 6.69%) and Auto was dumped. That quarter (December 2007), he delivered 54.66 per cent (category average: 25.70%).   When the market collapsed in 2008, thankfully the fund did not plummet abysmally. But even its high cash allocations could not cushion the fall which hovered around the category average. ...

Health for Wealth - How to buy Health Insurance ?

Tax Saving Mutual Funds Online Current open Infra Bond Application form   HEALTH insurance is a relatively new phenomenon in India. Hence, it is not on the top of the mind for most people to make a conscious commitment towards health insurance. However, it is imperative for each one of us to plan for better health for our families and ourselves. There's no better way than to start with making health your top priority this year. So, your health insurance resolution charter would look something like: ■ Invest in health for wealth: Timely investment in health insurance can help build a security net and hedge sudden dilution of another financial asset class in the event of a health emergency, making it imperative to opt for a comprehensive health insurance plan. ■ Buy a comprehensive health cover that fu lfills your health needs for life: Buy a personal health insurance cover even if you have an employee cover because 'employer provided' health insuranc...

Stock Review: Havells

HAVELLS India's stock performance has been muted in the past three months, in line with the weak broader market. But, given the turnaround in its overseas subsidiary and the launch of new products in its consumer durable business, the company's stock may undergo a re-rating.    Havells is India's leading consumer electrical goods company, with consolidated sales of . 5,527 crore in the past four quarters. Its wholly-owned subsidiary Sylvania, which makes lighting and fixtures, has established brands in European, Latin American and Asian markets. Sylvania repre sented nearly half of the company's consolidated revenues in the first half of FY11.    Sylvania's poor financials hit Havells' consolidated performance in FY10. But, this has changed in the cur rent fiscal. Havells has reduced fixed costs of Sylvania by exiting from unprofitable businesses and outsourcing manufacturing to low-cost locations such as India and China. In the September 2010 quarter, Sylv...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now