Step 1: Understand Your Current Financial Situation
Before you can manage your money, you need to know where you stand.
Track Your Income:
- Know how much money you bring in (salary, freelancing, allowance, etc.).
List Your Expenses:
- Fixed (rent, bills)
- Variable (food, entertainment, shopping)
- Occasional (gifts, repairs, travel)
Calculate Net Worth:
Assets (cash, savings, valuables) – Liabilities (debts, loans) = Net Worth
Step 2: Set Clear Financial Goals
Goals help you stay focused and motivated.
Examples of Goals:
- Build a ₹10,000 emergency fund in 3 months
- Pay off credit card debt within 1 year
- Save for a laptop or vacation
Break them into:
- Short-Term Goals (0–1 year)
- Mid-Term Goals (1–3 years)
- Long-Term Goals (3+ years)
Step 3: Create a Simple Budget
Budgeting is telling your money where to go instead of wondering where it went.
Use the 50/30/20 Rule (optional):
- 50% Needs (rent, groceries, bills)
- 30% Wants (eating out, Netflix, shopping)
- 20% Savings & Debt Repayment
Tools to Use:
- Pen and paper
- Google Sheets or Excel
- Apps like Mint, YNAB, or Wallet
Step 4: Build an Emergency Fund
This is money you keep aside for life’s “uh-oh” moments.
Start small: Aim for ₹5,000–₹10,000
🎯 Target: 3 to 6 months of basic expenses
Keep it in a separate savings account, not your daily use account
Step 5: Kill High-Interest Debt First
Debt with high interest (like credit cards) drains your money fast.
Use one of these strategies:
- Debt Avalanche: Pay off high-interest first
- Debt Snowball: Pay smallest debt first to build momentum
Always pay more than the minimum if you can
Step 6: Automate Your Savings
Make saving money effortless.
Set up automatic transfers:
- From your main account to savings every month or week
- Even ₹500/week can grow over time
Step 7: Start Investing (Even Small Amounts)
Once you’re saving consistently and out of high-interest debt, grow your money.
Beginner Options:
- Mutual Funds (via SIPs)
- PPF (Public Provident Fund)
- ETFs (Exchange-Traded Funds)
- Index Funds
Don’t jump into crypto or stocks without learning first.
Step 8: Learn Basic Personal Finance
The more you know, the better decisions you make.
Resources:
- YouTube channels: CA Rachana Ranade, Pranjal Kamra
- Books: Rich Dad Poor Dad, The Psychology of Money
- Podcasts and blogs: “Millennial Finance”, “Finshots”
Step 9: Review Your Finances Monthly
Set a “Money Date” with yourself every month to:
- Check your spending
- See if you hit your savings target
- Adjust your budget as needed
Step 10: Protect What You’re Building
🛡 Get basic insurance:
- Health Insurance (even if you’re young)
- Term Life Insurance (if you have dependents)
🔐 Avoid scams, phishing links, and never share your OTPs.
Final Thought:
Tending to your money isn’t about being perfect—it’s about being aware, consistent, and intentional. Start small. Stay curious. You’ll be shocked how much progress you can make in just a few months.