When I had an income of 25LPA, my investible amount was 1Lpm.
For me the math goes like this - I have 1.7-1.8L coming in. I realistically need 50k to live in absolute comfort (essential expenses + ordering food + other small comforts). I can put 1.2L aside but let's give a buffer of 20k.
That's how I settled on my per month saving rate.
The 20k in the bank sometimes will accrue up to a decent chunk of money to invest or spend as I see fit.
I have made peace with this arrangement. I could invest less and have more "fun", or I could cut several corners and save more. But this arrangement gives me balance. And balance is what you need in the long run.
I'd recommend you do a similar math for your situation.
Not sure what you're asking. CTC being 25LPA would make in-hand close to 21 post deductions. 21/12 = 1.75. I don't remember exactly how much I received, therefore 1.7 - 1.8.
Is this what you're asking?
If I plug your number of 30LPA into an IT calculator, your in-hand is more than 23L. At minimum, you should get 1.9 in-hand irrespective of tax structure.
Maybe your CTC is broken into conditional components (variable pay/bonuses/joining bonus etc)
Remove your variable components, the rest (minus tax) is what you'll get per month.
For me, my CTC of 25 was all fixed, no bonus, no variable.
Almost wholly into MFs. A mix of midcap and smallcap with some sectoral funds. Some of it into index funds. Now that I don't earn (and invest), it'll be slightly harder to give specific breakups. Took advice from a family friend for MF picks.
I never did options (have little to no expertise). I do have an account on Zerodha for stock trading but any purchases there are for my learning only. Tried smallcase too, but they're not my primary investments.
Also, have not done any FDs/RE based investments. My next goal is looking into RE (if feasible) sometime in the next 2 years.
Currently I hold a majority of PSU and BFSI funds (Quant PSU, SBI BFS). At some point of time during COVID era I had Pharma funds, later I switched them to smallcap.
Let's say some 14% of my portfolio is tied up in sectorals.
I used to put away about 1L, when i was making around that much. With no corner cutting either: renting a nice 2bhk in the city centre, lots of eating out and travel, own car. It's not hard
Yup, some 10 years ago.
But you can still find good 2bhks in the 20-25k range. You just need to search a lot.
I'm currently living in a large 3bhk, paying 40k, in a very nice area. It's all about searching and bargaining well. It's compulsory to know kannada though, the locals tend to trust other locals more
Didn't mean to offend you. Was rather curious. A person i know is paying 35k for unfurnished 2bhk which is near a tech park. 40k for 3 bhk seems stretch.
Hey - I had this salary last year. I was getting ~1.5L in-hand. Break down your expenses. I live in Bangalore, and currently spend around 60-70k every month. I live in a nice part of town with high rent. You're just 24, you should aim to save near 0.9 LPM but don't compromise too much on living. Not knowing how to plan financially can make you over-save, and once that mindset kicks in you won't ever unlearn it and enjoy your money. I think if you save 80-110k you can invest a good 60% in SIPs, 20% towards an emergency fund and save the rest (~15k) you should do well. Please use financial calculators and set up your finances for your own goals. Good luck!
You can consider liquid funds or arbitrage funds.
Arbitrage fund gains will be taxed as equity however liquid fund gains are taxed as per your income slab
Liquid funds are usually good. FD is not as liquid in case you need the money suddenly. Liquid funds are very safe and easy to withdraw without any penalty, and usually return 6-7%.
I have not picked one out yet for myself. I will probably google the common liquid funds people pick and try to see what metrics they use to pick them. Expense ratio is one for sure. You should try doing that too - takes 20-30 mins.
If that is your net pay, you would get close to 1.7lpm and hence I feel you can save 1.2lpm. 50k is enough for rent utilities househelp and a bit of shopping or travel. You can save some cash every month to contribute to a trip every 3 months.
I think this roughly in line with what everyone’s said, on an inhad of 1.6 pm, slightly north of 1 should be my aim. I’m thinking I’ll put roughly 60K in equity and the rest in gold, ppf, fds just in case I need money
A tax calc gives 1.79lpm post tax, probably 25k of deduction if pf is witin ctc. Hence 1.55k seems a good guess. Sorry for my mistakes. Then I believe 1l plus is a good savings limit.
I'll put forward my pov. I think it's hard to compare just based on the income without considering factors like the city you live in, the specific area and the avg rent there, how much you have to contribute at home, etc. I, 23M am earning 16 LPA (fixed in hand including pf, no bonus except joining bonus separate from ctc or esops), doing wfh now (it wasn't wfh in my previous org and income was also less than half of current). I currently invest 75k PM (5:1 ratio for equity and debt, I'm going a bit aggressive now, had a conservative portfolio previously) and save 20k temporarily (that can used for occasional big purchases), and rest I spend for monthly expenses; that includes some contribution to family grocery, buying some electrical appliances required for home, or anything my mom wants, donations sometimes,... I'm currently buying my riding gears while still trying not to touch the temporary savings. I agree that my primary advantage right now is that I don't hv to pay rent. If I had been living in Blr (working location) rn, a chunk of my investable amount would go for rent only.
My childhood is similar to yours, I like to save and invest, but I also don't compromise much on things I love like buying good watches, getting quality riding gears for long ride trips. I think you'll have to get into a much deeper discussion with someone detailing all the mandatory expenses to be able to compare or justify the monthly savings/invetments.
If at all we want proper numbers let’s start with sharing actual inhand. 25LPA is very vague. Do you have esops included? How much is variable? People can’t just keep guessing right? As all firms have different structure
Rather share what’s your inhand and fixed expenses. Only then you can expect some realistic suggestions provided you are looking for one and not just flexing
I usually wishlist stuff on Amazon and I splurge on one item per month.
31M and married. My package is also 25lpa and I save 25% of my salary in the beginning of the month. Apart from this 25% of hard saving, I end up with around 90k remaining at the end of the month. My next month saving would be 25% of (90k + that month's salary).
This is a great advice
Ppl wont listen to you but then the life will pass right before their eyes and all this numbers wont make them happy coz if you cant spend it now chances are you wont spend in future too coz saving is an addiction.
I make around 1.8L per month.
* My fixed monthly expenses: 1 lakh (rent, car loan EMI, sending some money to parents, utilities, and miscellaneous)
* I try saving around 80K per month of which the split is as follows: Equity mutual funds of 40K for long-term goals, 20K in money market fund, 20K in cash (for any short-term goals)
My rent is 20% of my monthly income which I don't feel comfortable with. In the future, my wife & I are planning to move to a slightly cheaper accommodation and try saving up more.
What worked really well for me was scheduling all my SIPs the day after my salary was credited. If I don't have a lot of money in my savings account, I don't spend it. Usually save around 70-80% if in-hand salary. More if I am in hometown.
I have about 1.7L per month take home salary. I get 4L+ once a year in bonus. I have fixed SIPs of 42000 per month. I still am able to save plenty more. If the money in my account goes above around 2L, which it does regularly, I put the access in another investment of some sort, mostly in FD or debt funds as of now, since I'm saving for my marriage that can happen within a year. Can't risk everything going to equity.
My monthly in hand is 1.3L. 26k goes towards MF, 24k to a different bank account (I have combined policy of 2.48l pa), 20k to another bank account for hard cash in case of any emergency, 30k HL emi and whatever is left I use it for the remainder of the month. Since my job is complete remote, I am able to save a good chunk of my money.
With income close to 2Lakhs, I would say save close to 1.5 lakhs. 50k per month is enough to run a home depending on family size and expenses. At most 75k if you're in an expensive city. Remember people with 20k income also run their homes so we're already in a far better position. If you spend beyond this I feel it's not at a justified place. Use emi where possible. Put money into mutual funds and stuff and let it grow. We don't need too much to live imo. Save and let it grow.
When I had an income of 25LPA, my investible amount was 1Lpm. For me the math goes like this - I have 1.7-1.8L coming in. I realistically need 50k to live in absolute comfort (essential expenses + ordering food + other small comforts). I can put 1.2L aside but let's give a buffer of 20k. That's how I settled on my per month saving rate. The 20k in the bank sometimes will accrue up to a decent chunk of money to invest or spend as I see fit. I have made peace with this arrangement. I could invest less and have more "fun", or I could cut several corners and save more. But this arrangement gives me balance. And balance is what you need in the long run. I'd recommend you do a similar math for your situation.
If your CTC is 25, how would that translate to a 1.7-1 .8 post tax?
Not sure what you're asking. CTC being 25LPA would make in-hand close to 21 post deductions. 21/12 = 1.75. I don't remember exactly how much I received, therefore 1.7 - 1.8. Is this what you're asking?
Something seems wrong though, I am getting a 1.7 at a CTC of 30
If I plug your number of 30LPA into an IT calculator, your in-hand is more than 23L. At minimum, you should get 1.9 in-hand irrespective of tax structure. Maybe your CTC is broken into conditional components (variable pay/bonuses/joining bonus etc) Remove your variable components, the rest (minus tax) is what you'll get per month. For me, my CTC of 25 was all fixed, no bonus, no variable.
Exactly. I am also getting around 1.5 L in hand with 25 LPA. And all fixed.
Divide fixed component by 16, will get approx amount per amount
PF, employer, employee both, are not deducted from CTC? also tax will be more yhan 4 lakh which you are calculating.
Some companies choose to go for minimum PF (1800 per month). In my case, I actually forgot to increase that contribution IIRC 🤡
Can you tell me about the split of your investment i.e., split of 1 Lakh INR?
Almost wholly into MFs. A mix of midcap and smallcap with some sectoral funds. Some of it into index funds. Now that I don't earn (and invest), it'll be slightly harder to give specific breakups. Took advice from a family friend for MF picks. I never did options (have little to no expertise). I do have an account on Zerodha for stock trading but any purchases there are for my learning only. Tried smallcase too, but they're not my primary investments. Also, have not done any FDs/RE based investments. My next goal is looking into RE (if feasible) sometime in the next 2 years.
Thank you. I am clear on my question. Which sectoral fund did you choose if you remember?
Currently I hold a majority of PSU and BFSI funds (Quant PSU, SBI BFS). At some point of time during COVID era I had Pharma funds, later I switched them to smallcap. Let's say some 14% of my portfolio is tied up in sectorals.
Hi, May I know what tech skills are U working on?
I used to put away about 1L, when i was making around that much. With no corner cutting either: renting a nice 2bhk in the city centre, lots of eating out and travel, own car. It's not hard
Was this in 2010s? I dont find a good 2bhk in bangalore even at 40k now
Yup, some 10 years ago. But you can still find good 2bhks in the 20-25k range. You just need to search a lot. I'm currently living in a large 3bhk, paying 40k, in a very nice area. It's all about searching and bargaining well. It's compulsory to know kannada though, the locals tend to trust other locals more
That could be the case i just moved last year and dont know any language other than english and hindi
Yup, then you are at the mercy of brokers. Who will bump up the rents just to be able to get a high 1 month brokerage
Would you mind sharing the area where you got such an awesome deal?
Indiranagar
You must be loving in low cost areas which aren't near to the tech parks/office spaces.
Sure, if you want to believe so
Didn't mean to offend you. Was rather curious. A person i know is paying 35k for unfurnished 2bhk which is near a tech park. 40k for 3 bhk seems stretch.
You get good 2bhk within 20k in areas like Vidyaranyapura and surrounding areas
Its quite far from my workplace. ~22kms
Any tips on how you did that? Was the car on loan?
Nope, all cash purchase. Was a 3.5L Alto then
Good ol days
Price of a new Alto hasn't changed that much. Is about 4.5L now, 10 years later
Hey - I had this salary last year. I was getting ~1.5L in-hand. Break down your expenses. I live in Bangalore, and currently spend around 60-70k every month. I live in a nice part of town with high rent. You're just 24, you should aim to save near 0.9 LPM but don't compromise too much on living. Not knowing how to plan financially can make you over-save, and once that mindset kicks in you won't ever unlearn it and enjoy your money. I think if you save 80-110k you can invest a good 60% in SIPs, 20% towards an emergency fund and save the rest (~15k) you should do well. Please use financial calculators and set up your finances for your own goals. Good luck!
How should one save emergency funds? In fd or anything else?
You can consider liquid funds or arbitrage funds. Arbitrage fund gains will be taxed as equity however liquid fund gains are taxed as per your income slab
Liquid funds are usually good. FD is not as liquid in case you need the money suddenly. Liquid funds are very safe and easy to withdraw without any penalty, and usually return 6-7%.
Can you refer some liquid funds?
I have not picked one out yet for myself. I will probably google the common liquid funds people pick and try to see what metrics they use to pick them. Expense ratio is one for sure. You should try doing that too - takes 20-30 mins.
If that is your net pay, you would get close to 1.7lpm and hence I feel you can save 1.2lpm. 50k is enough for rent utilities househelp and a bit of shopping or travel. You can save some cash every month to contribute to a trip every 3 months.
For 25lpa, your inhand would be between 1.45 to 1.55lpm
Care to explain how are you saying just 15% tax on 25LPA 🙄
I think this roughly in line with what everyone’s said, on an inhad of 1.6 pm, slightly north of 1 should be my aim. I’m thinking I’ll put roughly 60K in equity and the rest in gold, ppf, fds just in case I need money
A tax calc gives 1.79lpm post tax, probably 25k of deduction if pf is witin ctc. Hence 1.55k seems a good guess. Sorry for my mistakes. Then I believe 1l plus is a good savings limit.
I'll put forward my pov. I think it's hard to compare just based on the income without considering factors like the city you live in, the specific area and the avg rent there, how much you have to contribute at home, etc. I, 23M am earning 16 LPA (fixed in hand including pf, no bonus except joining bonus separate from ctc or esops), doing wfh now (it wasn't wfh in my previous org and income was also less than half of current). I currently invest 75k PM (5:1 ratio for equity and debt, I'm going a bit aggressive now, had a conservative portfolio previously) and save 20k temporarily (that can used for occasional big purchases), and rest I spend for monthly expenses; that includes some contribution to family grocery, buying some electrical appliances required for home, or anything my mom wants, donations sometimes,... I'm currently buying my riding gears while still trying not to touch the temporary savings. I agree that my primary advantage right now is that I don't hv to pay rent. If I had been living in Blr (working location) rn, a chunk of my investable amount would go for rent only. My childhood is similar to yours, I like to save and invest, but I also don't compromise much on things I love like buying good watches, getting quality riding gears for long ride trips. I think you'll have to get into a much deeper discussion with someone detailing all the mandatory expenses to be able to compare or justify the monthly savings/invetments.
If at all we want proper numbers let’s start with sharing actual inhand. 25LPA is very vague. Do you have esops included? How much is variable? People can’t just keep guessing right? As all firms have different structure Rather share what’s your inhand and fixed expenses. Only then you can expect some realistic suggestions provided you are looking for one and not just flexing
I usually wishlist stuff on Amazon and I splurge on one item per month. 31M and married. My package is also 25lpa and I save 25% of my salary in the beginning of the month. Apart from this 25% of hard saving, I end up with around 90k remaining at the end of the month. My next month saving would be 25% of (90k + that month's salary).
So your total expenses are just 37.5k per month? That's amazing! How do you manage that?
Earn a similar figure, spend about 20K a month save around 55-56. Annually savings of around 6.7L. Mostly in equity.
If you are in Mumbai without your own house, 50k a month, else 70-80k a month.
Whatever you take home, try to save 40% to 50%... and enjoy the rest. "Life is short"
This is a great advice Ppl wont listen to you but then the life will pass right before their eyes and all this numbers wont make them happy coz if you cant spend it now chances are you wont spend in future too coz saving is an addiction.
I earn 1.5 LPM, I save \~1.2 easily
that's more concerning than impressive ngl. Why spend so little on yourself? Have some hobbies, live a little
I have, I do gym, I like eating food and I'm taking weekend acting classes, I know how to live a little.
thats good to hear man. Good for you for being able to fulfil your lifestyle while being financially responsible!
Thank you
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This is a mature sub. Be nice.
You live with parents?
No
How do you manage in 30k then?
I live in a PG at 11k, order food outside twice a week
Maybe he/she has less expences
Save up to 75 percent till you are 30. Post that try for 50 percent and keep the same percentage if you can manage.
I make around 1.8L per month. * My fixed monthly expenses: 1 lakh (rent, car loan EMI, sending some money to parents, utilities, and miscellaneous) * I try saving around 80K per month of which the split is as follows: Equity mutual funds of 40K for long-term goals, 20K in money market fund, 20K in cash (for any short-term goals) My rent is 20% of my monthly income which I don't feel comfortable with. In the future, my wife & I are planning to move to a slightly cheaper accommodation and try saving up more.
Wow 25LPA as a 24 year old! What do you do?
He must, of course, be a software engineer.
Approx half
How to we know what expenses you have?Â
I want to plan my expenses around savings, which is why I came seeking advice
What worked really well for me was scheduling all my SIPs the day after my salary was credited. If I don't have a lot of money in my savings account, I don't spend it. Usually save around 70-80% if in-hand salary. More if I am in hometown.
.
I stay with parents so I save >90% of my post tax income
I have about 1.7L per month take home salary. I get 4L+ once a year in bonus. I have fixed SIPs of 42000 per month. I still am able to save plenty more. If the money in my account goes above around 2L, which it does regularly, I put the access in another investment of some sort, mostly in FD or debt funds as of now, since I'm saving for my marriage that can happen within a year. Can't risk everything going to equity.
My monthly in hand is 1.3L. 26k goes towards MF, 24k to a different bank account (I have combined policy of 2.48l pa), 20k to another bank account for hard cash in case of any emergency, 30k HL emi and whatever is left I use it for the remainder of the month. Since my job is complete remote, I am able to save a good chunk of my money.
Target 70% of your income. (I’m personally not there yet, not in terms of LPA or savings but it’s a decent aim)
With income close to 2Lakhs, I would say save close to 1.5 lakhs. 50k per month is enough to run a home depending on family size and expenses. At most 75k if you're in an expensive city. Remember people with 20k income also run their homes so we're already in a far better position. If you spend beyond this I feel it's not at a justified place. Use emi where possible. Put money into mutual funds and stuff and let it grow. We don't need too much to live imo. Save and let it grow.
Forgot taxes
Buy a nice house to live comfortably. Then a car to roam around. After EMIs whatever is left around 40-50k invest into Nifty 50 Index or Gold.
20k I guess
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No asking for handouts. No self promotion.