Last Updated:
Discover smarter budgeting and saving strategies for salaried individuals in India to improve financial planning and management.
How to make a smart budget? Follow these simple steps. (Representative Image)
Whether you run a business, work as a freelancer, or are employed in a corporate setup, budgeting and saving are essential for managing your finances. For salaried individuals, it’s not just important, it’s critical. A fixed income might give the impression of financial stability, but in many cases, it creates a false sense of security. People often continue spending regularly, delaying the idea of saving for “someday.”
Now, when you talk about budgets and savings, you can’t ignore life insurance, health insurance and other financial protections. But in India Insurance penetration is just 3.7 per cent of GDP as of FY 20223-25, with life insurance making up 2.8 per cent while non-life insurance comprises 0.9 per cent. And do you know that’s well below the global average of around 7 per cent?
This indicates how vulnerable many working professionals in India remain without a sound financial plan. Here’s how you can build a smarter approach to budgeting and saving:
One Step at a Time
Financial planning isn’t about complex spreadsheets or crunching numbers all day. It starts with understanding your money like where it comes from, where it goes and how to control it.
1. Track and Budget
From students to salaried professionals, everyone needs a budget. Use Excel, a budgeting app, or even a notebook, whatever works. As soon as your salary hits, allocate funds for fixed expenses like rent, EMIs and utilities. Then, assign an amount for discretionary spending (shopping, subscriptions, food delivery, etc.). Finally, prioritise saving, aim to put aside at least 20 per cent of your salary.
2. Emergency Fund & Health Insurance
One unexpected incident can shake up your entire savings. Employer health insurance helps, but it might not cover serious treatments or gaps between jobs. Get your health insurance worth at least ₹10–15 lakh. Also, start building an emergency fund that covers at least 6 months of your basic living expenses.
3. Don’t Just Save—Invest
Saving without investing leads nowhere. Inflation will slowly eat into your savings. So invest wisely.
For long-term goals (5+ years): Go for equity mutual funds.
For short-term goals (1–3 years): Stick to fixed deposits or debt funds.
And remember, never invest in something you don’t understand.
4. Plan Tax-Saving Investments
Don’t wait until the end of the financial year to buy ELSS or insurance just to save taxes. That rarely helps in the long run. Instead, plan your tax-saving strategy from the beginning of the year. Use Section 80C properly and combine PPF, EPF, or ELSS based on your goals.
5. Set Auto Debits
Set up auto debits for SIPs, insurance premiums, emergency fund contributions and credit card bills. It builds discipline without the mental load of remembering every due date.
6. Evaluate your system yearly
As your salary grows, your financial plan should also evolve. Do a yearly check:
Review insurance policies
Rebalance your investments
Adjust your budget
Smart budgeting isn’t about cutting down joy or being too strict. It’s about being aware, prepared and consistent. Start small, build good habits and take control of your money. That’s what smart financial planning means.
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al…Read More
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al… Read More
- Location :
Delhi, India, India
- First Published:
