Receiving the first salary credit to your account was indeed a top-of-the-world feeling. Right? However, you will
realise that earning the salary is perhaps the easy part, the bigger challenge is to manage it efficiently to meet
future goals. Now, managing your money doesn’t just mean meeting your day-to-day needs and wants but also about
being able to save up a part of your salary with an aim to attain financial independence.
So, if you are struggling to manage your salary, consider yourself lucky that you’ve landed up at the right place.
These tried and tested, simple yet super effective tips can help you manage your salary efficiently.
1. Track your money –
The first step towards good management of money is to know where every rupee goes. You can maintain a record of
where you spend your money to have an idea of how much your monthly spending is and manage it. This might seem like
a daunting task at start, but if you do practice every month, dedicatedly, you might successfully control your
expenses.
2. Create a Budget –
Planning can help in managing your finances properly. If you can make a budget for monthly expenses, you will know
what the outflows are. To begin with, you may pen down your ‘what are you’re spending on vs. what you want to spend
on’ expenses to cut down on the unnecessary expenditures. Followed by, apply the 50-30-20 rule and see the
difference. i.e. 50% for your needs, 30% for your wants and 20% for savings and investments.
3. Set Financial Goals –
It is important to set yourself some financial goals and work towards achieving them. You can start by listing down
short, medium and long term goals separately. For example, buying a bike or planning a mini vacation can fall under
the short or medium-term category. Whereas, planning for a happy retired life or your child’s education could be
termed as a long-term goal.
4. Start Investing Early –
Leaving your entire salary idle in the savings account is not a wise idea. You should have enough money in the
savings account for your everyday needs and for emergencies, however investing your extra money could be a lucrative
option. The best time to invest was yesterday but the next best time is right now. If you’re a beginner, you can
start a SIP in mutual funds with as low as Rs.500 investing to earn potential returns.
5. Save Tax –
When you earn a salary, you will have to start paying income tax at some point in your life. However, there are
smart ways of reducing your taxes by making tax-deductible investments. You can invest in an ELSS (a type of SIP
investment with a minimum monthly investment of Rs. 500) that will give you the double benefit of tax deductions as
well as potential appreciation.
6. Build an Emergency Fund –
The future is always uncertain and it helps to save some money for an emergency on account of illness or a job loss.
It is advisable to put aside a small part of the savings towards a contingency fund that is liquid and easily
accessible.
Managing your salary is the first step towards achieving financial independence over a period of time. The golden
rule is to start managing your salary from the first paycheck and be consistent. This will help you enjoy passive
income over a longer period of time. Just allow professional fund managers to manage your investments while you
focus on building your career and keeping that paycheck growing.
Disclaimer
An investor education initiative by ICICI Prudential Mutual Fund
Visit www.icicipruamc.com/note to know more about the process to
complete a one-time Know Your Customer (KYC)
requirement to invest in Mutual Funds. Investors should only deal with registered Mutual Funds, details of which
can be verified on the SEBI website http://www.sebi.gov.in/intermediaries.html For any queries, complaints &
grievance redressal, investors may reach out to the AMCs and/or Investor Relations Officers. Additionally,
investors
may also lodge complaints on https://scores.gov.in if they are unsatisfied with the resolutions given by AMCs.
SCORES portal facilitates you to lodge your complaint online with SEBI and subsequently view its status.
(http://www.icicipruamc.com/note) (http://www.sebi.gov.in/intermediaries.html) (https://scores.gov.in/)
Mutual Fund investments are subject to market risks,
read all scheme related documents carefully.
