Even with a monthly income of ₹50,000 to ₹1 lakh, many Indians often feel financially stuck – not due to low earnings, but poor money habits, says CA Nitin Kaushik.
In a recent post, Kaushik outlined seven classic financial blunders that trap salaried individuals in a cycle of paycheck-to-paycheck living – and offered practical advice to break free.
1. Spending Before Budgeting
“Spending first and budgeting later – or never – is the biggest mistake,” Kaushik warns. For instance, someone earning ₹50,000 might splurge ₹12,000 on food deliveries and online shopping early in the month, only to struggle later. His fix: Follow the 50-30-20 rule – allocate 50% to needs, 30% to wants, and 20% to savings and investments.
2. No Emergency Fund
Whether it’s a medical bill or job loss, emergencies can derail your budget overnight. Kaushik urges people to start small – even ₹2,000 a month – and build a fund worth ₹75,000 to ₹1 lakh, parked in a liquid fund or fixed deposit.
3. Saving, But Not Investing
Saving alone isn’t enough. ₹20,000 in a savings account earns just 3% interest (₹600/year). Instead, Kaushik recommends SIPs (Systematic Investment Plans). Investing ₹5,000/month for 10 years with 12-14% returns can grow into over ₹11-13 lakh – thanks to compounding.
4. Lifestyle Inflation
Got a raise? Don’t immediately upgrade your lifestyle. Many let expenses rise with income, but Kaushik suggests holding off for a year and investing the “extra.” “Live like you’re still earning less – future-you will thank you,” he said.
5. Impulse Shopping
From Zomato to Amazon, impulse buys are one tap away. Kaushik advises using the 24-hour rule: add items to cart, wait a day, then decide. “If you don’t want it after 24 hours, you never needed it.”
6. Trapping Yourself with EMIs
That ₹5,000 EMI may seem small, but it adds up to ₹60,000+ a year. He suggests capping EMIs at 15% of your net income and always asking, “Can I afford this if I lose my job tomorrow?”
7. Not Tracking Expenses
The most underrated habit? Tracking where every rupee goes. Kaushik says even 30 days of logging your expenses – via an app or spreadsheet – can completely transform your money habits.
Final advice
“Your salary is not just for spending – it’s your launchpad, your first investor, your ticket to freedom. Whether you earn ₹30,000 or ₹1 lakh, managing it well is what makes all the difference.” Don’t let your income go to waste. A few smart changes now can build the foundation for long-term financial freedom.