Want to get an understanding of where I can improve with my budgeting

[allspiceberry143]

@mike230 Will definitely do! Is it okay if I reach out to you in case they bamboozle me?

And nah, didn’t bother with PPF and NPS. I was mainly focusing on investing and getting a decent enough return first, and focusing on these once I have a good enough corpus built up. I was thinking of looking into these maybe after a few years or will that be too late? What do you suggest? My financial adviser advised me against NPS when I mentioned it to him a few days ago stating lower returns as compared to MFs

 

[mike230]

@allspiceberry143 Sure, shoot me a dm if you wanna discuss more!

Leaving NPS is fine, i find PPF good personally coz it’s a tax free return, so instead of FD i would have that. Its pretty easy to get a loan against the PPF amount with helps with liquidity (you can get it at 1-2%more than the ppf rate).

It’s a debt substitute investment for me, but you can go for other options a per your preferences.

 

[allspiceberry143]

@mike230 Ooh that’s interesting! I was totally unaware about the loan against PPF amount thing, definitely gonna check that out!

Thank you so much again!

 

[gvz]

@allspiceberry143 You're earning very well at your age , what do you do

 

[allspiceberry143]

@gvz It doesn’t feel enough honestly I’m a data analyst

 

[adrianawakened505]

@allspiceberry143 NOT FINANCIAL ADVICE

You can try reducing budget on groceries and outings and see if you really need anything before spending money on it.
It's also not a bad idea to try some riskier investments since you're still young. You can consider putting a Lumpsum of 2-3 lacs on some small and mid cap MFs or invest/trad eit through a registered RA.

At current rates you need at least 8-10 crores for your life milestones and a comfortable retirement by 60, making your current portfolio and savings look rather inadequate.

Also, have a look at liquid funds, you can maybe put all your salary and savings in liquid funds as they're very low risk and also give a decent 4-5% return. The only downside is you can withdraw only 50k a day. Money market is a strange concept to most so do your due reasearch before investing anywhere. Keep looking for opportunities both in the market and in your career and don't be afraid of risks, strive for higher income and healthy portfolios.

 

[adrianawakened505]

Also, get a term insurance. Nowadays you can get a crore + worth term insurance for really cheap then what it used to be.

 

[allspiceberry143]

@adrianawakened505 Thank you for this!

I was thinking of shelling out another 10k from my groceries/‘wants’ expenses into another investment. You’re absolutely right, I should amp up my risk appetite, but you can see why I have been playing it safe till now I have a few investments in midcaps, and have started looking into small cap too- so you assured me that I’m on the right path tysm! I recently did another lumpsum investment of 1 lac into a midcap, but I’ll use my next year’s bonus to increase my lumpsum more

As for liquid funds, I had no idea how they operate, so I’ll definitely read into them and find out if it’s suitable for me, thanks for the tip!

And already covered on the term insurance- have one with a sum assured of 2cr. Is that enough?

 

[nhecu942]

@allspiceberry143 Should we bow?? Yes she's a queen!!

 

[allspiceberry143]

@nhecu942 No please, just a pat on the back and gentle assurances work wonders

 

[johnc101]

@allspiceberry143 OP, I'm in similar boat as yours in terms of income and expenses. You're doing good. Track your expenses better to decide where you spend more.
see this

 

[allspiceberry143]

@johnc101 Yeah, didn’t have a big enough income until now where I actually had some extra money to splurge lol and now that I do, I think I am taking ‘treat yourself’ a little too seriously I definitely need to track my expenses within that ~30k bucket I have. That seems like a cool app, what is it? I just use Excel on my phone lol

 

[johnc101]

@allspiceberry143 This app is called money mgr.

 

[ocifferpls]

@allspiceberry143 What's your fixed pay?

 

[allspiceberry143]

@ocifferpls It’s the same as mentioned in the post. There are no variable components to my job as such, except the year end bonus which is pretty much predetermined every year and not that glorious

 

[patrickmiller]

@allspiceberry143 Given your age, background and presumably unmarried marital status, you should invest 50-55% in equities, 10% in debt, and the rest for your monthly needs.

 

[allspiceberry143]

@patrickmiller Hi, just a follow up question on this- 50-55% of what? The entire monthly salary? I don’t think that will be possible for me given the responsibilities and liabilities I have

 

[patrickmiller]

@allspiceberry143 50-55% of your take home salary. If that's not possible then look at your monthly liabilities. Reduce spending wherever possible and put whatever is left in equities.

 

[davexpression]

@allspiceberry143 Congratulations on such a nice income at this young age. Kudos buddy.

I wonder why no one has mentioned prepayment of home loan. I would encourage you to cut down on eat outs and other not-so-necessary expenses and divert all that funds towards HL payment. ~30K for a single person seems too much to me. Plus I am unable to understand how come you are paying EMI and Rent at the same time? Is the property under construction ?

What about your siblings? Are they earning and contributing along with you for parent's expenses?

 

[allspiceberry143]

@davexpression Thank you!

Someone in the thread did mention paying off home loan, but my home loan is currently at 8.4% with 8 years to go and it gives me a sweet tax deduction as well, and I figure that investing that lumpsum would give me a better return.
As for the rent bit, I stay in a different city than my parents, hence rent being the necessary evil in this case.
Out of the ~30K, I do end up saving some cash almost every month, so I was thinking of reducing this budget to invest a little bit more. However, the extra cash I save from this helps cover the flight tickets that I book every other month/quarter for travel back home or to my partner, so I’ll need to see how much I can invest more without causing a dent.

And yes, my siblings do contribute! However, both of them are unable to contribute regularly so I try to be regular with my contributions instead, hence taking on the major expenses like premiums and emergency fund.