BUDGETING BASICS FOR INDIAN SALARIED EMPLOYEES: TAKE CONTROL OF YOUR FINANCES BY SAI MANI KUMAR, FOUNDER | SMK FINANCIAL SOLUTIONS

Juggling work, family, and social life can be tough, especially when it comes to managing your finances. But for Indian salaried employees, there’s an extra layer of complexity – navigating taxes, deductions, and a dynamic cost of living.

That’s where budgeting comes in. It’s your roadmap to financial well-being, helping you understand your income, expenses, and savings goals. Here at SMK Financial Solutions, we believe that everyone deserves to feel empowered about their money. So, let’s dive into some essential budgeting tips for Indian salaried individuals:

1. Know Your Take-Home Pay: It’s not just your gross salary that matters. Understand your deductions like taxes (including understanding the new and old tax regimes), provident fund (PF), and professional tax (PT) to calculate your net monthly income.

2. Track Your Expenses: Awareness is key! Keep track of your daily, weekly, and monthly expenses. There are many free budgeting apps or simply maintain a spreadsheet to categorize your spending (rent, groceries, transportation, entertainment, etc.).

3. Prioritize Needs vs. Wants: Separate your essential needs (rent, food, utilities) from your wants (dining out, movies, shopping sprees). Allocate a realistic portion of your income for each category. Here’s a budgeting rule you can consider: the 50/40/10 rule. It suggests allocating:

• 50% of your income to needs.
• 40% of your income to savings and debt repayment.
• 10% of your income to wants.

Important to Remember: This is a general guideline. The ideal allocation may vary depending on your individual circumstances, such as your salary, living expenses, and financial goals. For example, someone with a higher cost of living might allocate a higher percentage to needs, while someone with a lower salary might need to allocate a smaller portion to savings and debt repayment initially.

4. Embrace Smart Saving: Pay yourself first! Set up a recurring transfer to your savings account before you start spending. Explore options like Employee Provident Fund (EPF) contributions and tax-saving investments (Section 80C) to maximize your savings and reduce taxable income.

5. Be Mindful of Debt: Debt can quickly spiral out of control. Use credit cards wisely and only for planned purchases. Aim to pay your credit card balance in full each month to avoid accumulating interest charges.

Bonus Tip: Factor in Unexpected Expenses: Life throws curveballs. Set aside a small emergency fund to cover unexpected costs like medical bills or car repairs.

Remember, budgeting is a journey, not a destination. Review your budget regularly, adjust as needed, and celebrate your milestones.

Feeling overwhelmed? Don’t go it alone! SMK Financial Solutions can help you create a personalized budget that works for your unique situation and financial goals. Our experienced financial advisors can guide you through the process, answer your questions, and help you develop a roadmap to achieve your financial dreams.

Schedule a consultation with SMK Financial Solutions today and take control of your financial future! We offer a minimal fee for the first consultation to get you started.

Sai Mani Kumar

Founder | SMK Financial Solutions

Empowering you to make smart financial decisions.