People use a variety of methods to manage expenses, such as the 70/30, 60/40, or 50/50 rule. For instance, the 70/30 rule means you use 70% of your monthly income and save 30%. Decide on what’s comfortable for you. Let’s assume you decide that 70% of your income should go into monthly household expenses.
Next would be to manage the household expenses. Breaking down expenses into categories is one good tip to have greater visibility on expenses and therefore ability to manage better. If you are wondering how to manage grocery expenses, breaking down the requirements into the following categories can help -
- Grain and grocery items
- Milk, eggs, meat, fish, etc.
- Medicines that need to be taken on a regular basis
- Fresh fruits
- Processed foods like biscuits, bakery goods, snack items, etc.
Once you have this segmentation, you will know exactly how to manage and control your expenses and save more. Try to ensure that your monthly expenses do not go beyond that 70% figure.
Of the remaining 30%, look at a 40/60 split - 40% goes into savings and 60% into investments. For example, if ₹10,000 is the savings amount every month, ₹4,000 can be put into savings and ₹6,000 into investments.
If your investments are more long-term, then consider the following factors prior to investing:
- Define your risk appetite – high, moderate, or low.
- Define your investment goal and the time horizon; for instance, you may seek to build an investment corpus value of ₹50 lakh in 20 years.
- Either use a financial advisor you trust or do your own research to find out financial instruments that will allow you to reach your investment goal. These include mutual funds, systematic investment plans (SIPs), stocks and shares, exchange-traded funds (ETFs), bonds, international funds, and many more.
All the Mutual Fund investors have to go through a one-time KYC (Know Your Customers) process. Investor should deal only with the Registered Mutual Funds (RMF). For more info on KYC, RMF and procedure to lodge/redress any complaints, visit https://www.pgimindiamf.com/ieid.
MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY. Read more