Spending Lessons for New Comers

Set Goals - If one does not know the destination, journey can be never ending and almost without any progress. So as the first step, set some goals for your self. You want to buy a car, a new laptop, want to get a house in two years, planning to get married in coming years. Good! Choose one or many goals and start saving towards them.

Setup Emergency Fund - This is required so that if some emergency comes, your whole financial plan is not derailed. Generally speaking, 3-6 months of in hand salary should be saved in bank account as emergency fund.

Save for Tax Rebates - Rs One Lakh of savings get you good tax rebate under section 80C. Take full advantage of these schemes.

Save for Future - Start investing in long term savings instrument systematically. Choose equity or gold or any other instrument that you are comfortable with.

Make Budget - Make a budget of monthly and annually expenses. Try to keep it within 50% of in hand salary and slowly try reducing it to 30%.

Track Expenses - Track your expenses so that you can know any leaks in spending money.

Avoid Credits - Try to avoid credit cards or any type of loans as much as possible. Set goals and save in cash for anything you want.

Have Fun - But have fun in process. It's OK to go over budget once in a while. If you will not enjoy your life, there is no point in saving it for future.