1) Foundations: Do these first
Track expenses for 30 days. Use a simple sheet or app; tag each spend as must-have or nice-to-have.
Create a 6–12 month emergency fund. Keep in high-liquidity: Liquid MF Overnight MF High-yield Savings.
Automate savings on salary day. Standing instruction to SIPs + Recurring Deposit; pay yourself first.
No-cost EMI ≠ free. Prefer upfront payment; if EMI, ensure total cost (incl. fees) is clear and affordable.
2) Budgeting that survives real life
50/30/20 (Starter)
- 50% Needs (rent, groceries, EMIs)
- 30% Wants (eating out, subscriptions)
- 20% Savings (SIPs, RD/PPF)
60/20/20 (Family)
- 60% Needs (kids, parents, utilities)
- 20% Wants
- 20% Savings & Insurance
Tip: Put yearly expenses (insurance premium, car service) into a monthly “sinking fund”.
3) Start SIPs the sane way
Core allocation
- Equity Index SIP: Nifty 50 / Sensex (low cost, long term).
- Large & Midcap / Flexi-cap: Diversify beyond top 50.
- Debt Allocation: Short duration or Gilt for stability.
Rebalance annually; avoid chasing last month’s top performer.
Rules of thumb
- Time in market > timing the market.
- Increase SIP by 5–10% every salary raise.
- Don’t stop SIPs during corrections—buy more units cheaper.
4) Tax-saving ideas that actually help
Section 80C (₹1.5L)
- ELSS funds (3-yr lock-in)
- EPF/PPF, NSC, 5-yr tax FD
- Principal on home loan
80D & Others
- 80D: Health insurance premium
- 80CCD(1B): NPS additional ₹50k
- HRA / Home Loan interest (80EEA as per rules)
Don’t buy investment-linked insurance for tax alone; keep insurance and investing separate.
5) Insurance checklist (must-have)
- Term Insurance: 10–15× annual income; separate from investments.
- Health Insurance: Family floater; check room rent limits, waiting periods.
- Accident/Disability cover: Often missed; inexpensive but crucial.
- Critical Illness (optional): Lump sum on diagnosis for income protection.
6) Loans & debt: clean-up plan
- List all loans with outstanding, interest, EMI, and tenure.
- Snowball (smallest first) for motivation or Avalanche (highest interest first) for maths—pick one and stick to it.
- Close costliest credit first (credit card / personal loan).
- For home loan, consider part-prepayment yearly if surplus cash allows.
7) Lifestyle tweaks that save a lot
- Bundle OTT/mobile/BB plans; kill unused subs.
- Buy staples monthly in bulk; use price-tracking.
- Cook 3–4 days a week; plan meals & freeze.
- Use credit cards only if you pay in full; chase rewards, not debt.
- Energy savings: LED, AC timer, service appliances.
- Buy quality once; avoid “cheapest now, costly later”.
8) Handy tools & templates
FAQs
Keep 6 months of expenses (12 months if self-employed). Park in liquid/overnight MF or high-yield savings. Refill immediately if used.
If you invest well in 80C/80D/80CCD and claim HRA, the old regime can win. Otherwise the new regime’s lower slabs may suit. Compare both once a year.
Yes—3-year lock-in and equity growth potential. Prefer SIPs and hold beyond 3 years for better outcomes.
Term insurance (10–15× income) and family floater health plan. Add accident/disability cover; consider critical illness if budget allows.
Ad Slot — In-Article
Quick Jump
Free mini-checklist
5 steps to be “financially safe” this year.
- Set emergency fund target & account
- Start/raise SIPs
- Buy/verify term & health cover
- Pick tax regime & investments
- Automate bill pay + savings
Ad Slot — Sidebar