How To Manage Your Income and Expenses

17th April 2025, Gaurav Kumar Singh

You land your first job, get your first paycheck, and suddenly, you’re rich!

Or at least, it feels that way… until rent, food, Netflix, weekend trips, and your shiny new bike eat away your salary faster than you can say “I’m broke.”

Sounds familiar?

Don’t worry. Managing your money doesn’t have to feel like punishment.

It’s all about striking the right balance between living your life today and securing your future tomorrow.

Here’s a super simple way to get started, using a real-world example!

Step 1: Know What’s Coming In

First things first — how much are you really earning?

For example, you have:

• Salary (after tax): ₹55,000
• Side hustle, dividends, freelance gigs: ₹0

So your Total Income is ₹55,000.

Not bad for a 21-year-old just starting out, right?

Step 2: Figure Out Where Your Money Must Go

Now, before you dream about buying the latest iPhone or planning a Goa trip, let’s talk about mandatory expenses — the stuff you can’t skip.

Expense	Amount (₹)
Rent	10000/-
Food	6000/-
EMI (Bike loan/Gadget loan)	3000/-
Motorcycle Insurance	250/-
Utility Bills (Electricity, Gas, Internet)	2500/-
Transportation (Fuel, Metro, Bus)	3000/-

Total Mandatory Expenses = ₹24,750

What’s left?

₹55,000 – ₹24,750 = ₹30,250

You still have a good chunk of money left! But wait — don’t blow it all yet.

Step 3: Pay Yourself First (a.k.a. Start Investing)

Before you even think about spending that extra ₹30,250, do this: Save and invest a part of it.

In this case:

• Investments in Mutual Funds, Stocks, or Bank Deposits = ₹15,000

“Beginner’s Guide To Investing in India“

“Coffee Can Investing“

After investing, you’ll still have:

₹30,250 – ₹15,000 = ₹15,250 in your pocket.

Nice, right? But wait, there’s more you need to do.

Problem Area: You Forgot About Emergencies!

Most newbies forget to plan for medical emergencies or future big expenses.

That’s a dangerous game.

Solution:

• Get Health Insurance early (₹5 lakh cover at least) so you’re not wiped out by hospital bills.
• Get Life Insurance if you have family depending on you or loans.
• Build an Emergency Fund: Save at least ₹1.5 lakh (six months’ expenses) for rainy days.

Once that’s in place, you’re protected and can actually enjoy life.

Step 4: Now, let’s Talk About Lifestyle Spending (a.k.a. Fun Money)

This is where things go wild.

Here’s how the money was spent:

Fun Expenses	Amount (₹)
Motorcycle Maintenance	500/-
Gym Membership	3000/-
Newspapers & Books	800/-
TV & OTT Subscriptions	1500/-
Movies	2500/-
Clothes, Shoes & Accessories	6000/-
Eating Out	4000/-
Short Trips	5000/-

Total Discretionary Expenses = ₹23,300

Balance after Fun = ₹15,250 – ₹23,300 = -₹8,050

Oops! You’re ₹8,050 in the red.

You just overspent and will now probably borrow money or swipe your credit card.

Not good.

Problem Area: Fun Killed the Funds

High discretionary spending means you’ll end up borrowing just to live your normal life.

Solution:

• Cut down on impulsive shopping, eating out, and expensive trips.
• Plan for trips and big buys in advance.
• Save first, spend what’s left (not the other way around!).

Tip: Want to party guilt-free? Set up a “Fun Fund” — save a small amount monthly just for enjoyment.

The Real Formula for Winning the Money Game

Here’s your cheat sheet:

• Earn → Save/Invest → Spend what’s left (not the other way around)
• Protect yourself: Health and life insurance are your safety nets.
• Plan your fun: Enjoy life, but within your means.
• Grow your wealth: Let your money work for you through smart investing.

Bottom line:

You don’t need to live like a monk to manage your money well.

A few smart choices today = a lot fewer worries tomorrow!

Final Takeaway

The first rule of adulting is simple: Respect your money, and it will respect you back.

Small steps like budgeting smartly, saving early, investing wisely, and spending mindfully can set you up for a life full of freedom, choices, and peace of mind.

Start today. Your future self will give you a standing ovation.