Earning ₹1 lakh per month sounds like a financial milestone—but many people still struggle to save. Rent, EMIs, lifestyle expenses, and impulse spending often leave little at month-end.

The real issue usually isn’t income—it’s lack of structure. Without a clear plan, people either avoid investing altogether or chase risky returns. If your monthly salary is ₹1 lakh, here’s a simple and practical roadmap to get your finances on track.

Step 1: Follow the 50-30-20 Rule

One of the easiest budgeting methods is the 50-30-20 rule. Divide your ₹1 lakh income like this:

🔹 50% – Needs (₹50,000)

Essential expenses such as:

• House rent

• Groceries

• Electricity, water, phone bills

• Transport

🔹 30% – Wants (₹30,000)

Lifestyle expenses like:

• Eating out

• Shopping

• Travel and entertainment

🔹 20% – Savings (₹20,000)

This should go toward:

• Investments

• Emergency fund

• Long-term goals

👉 If you’re currently saving only ₹15,000, don’t panic. Gradually cut expenses and move toward the ₹20,000 benchmark.

Step 2: Build a Safety Net Before Investing

Before chasing returns, protect yourself from financial shocks. Three things are essential:

1️⃣ Health Insurance

• ₹10 lakh cover for a 25-year-old costs about ₹800–₹1,000 per month

• Prevents medical emergencies from wiping out savings

2️⃣ Emergency Fund

• Save 3–6 months of essential expenses

• If your monthly needs are ₹50,000, target ₹1.5–₹3 lakh

• Keep this in a savings account or liquid fund

3️⃣ Life Insurance

• Required only if you have dependents

• Recommended cover: 15× annual income

• If you have no dependents, you can delay this

Step 3: Where Should Beginners Invest?

Jumping straight into stocks can be risky for beginners. Mutual funds offer diversification and professional management.

Good Mutual Fund Options for Beginners:

✔ Large-Cap Index Funds

• Invest in top 100 companies

• Stable, low-cost, and relatively low risk

✔ Flexi-Cap Funds

• Invest across large, mid, and small companies

• Balanced approach to risk and return

✔ Dynamic Asset Allocation Funds

• Automatically shift between equity and debt

• Suitable for volatile markets and new investors

📌 While small-cap funds have delivered over 21% returns in recent years, they are volatile. Large-cap funds have averaged around 13–14%, offering more stability.

Step 4: Keep It Simple and Stay Invested

• Avoid investing in too many funds

• Choose 2–3 quality mutual funds

• Start SIPs and stay invested long term

• Don’t panic during market ups and downs

💡 Compounding works best with time, patience, and consistency.