Sir, I am getting a petty salary of 20K per month with very little or no savings. Could you give some suggestions regarding savings. My family consists of my Mother, Wife and myself. We have no children. Whatever I earn goes to my household, medical expenditures etc. I regularly read your columns but the questions I read is about people who are already have over and above 1.00 Crore.
Ans: Your dedication is praiseworthy. You are reading, learning and asking questions. That itself is a strong step. You care for your family and want to save, even with Rs.20,000 salary. That positive effort matters much here.
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» Understanding Your Current Situation
Your household depends on your Rs.20,000 monthly earnings. You spend on food, bills, and medicines for your family. Savings are low, but you want security and hope. Every journey begins with small steps. Even Rs.100 saved each month gets bigger over time. Your will to save is your asset.
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» Prioritising Needs and Expenses
First, take care of essentials – food, rent, medicines, and daily bills. After spending on needed items, see how much is left over. Even small leftovers can be saved. List monthly expenses on paper. Find places where you can spend less. Buying in bulk, using local markets, using discounts, and careful budgeting help increase savings.
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» Building Emergency Cushion
You must keep a small emergency fund. Even Rs.500 or Rs.1000 set aside slowly builds security. This helps in emergencies, sickness or unexpected bills. Emergency fund should be easy to access, like a savings account or bank deposit. Never use emergency money for regular expenses.
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» Starting Your Saving Habit
Start by saving very small amounts in a basic bank account. Even Rs.50, Rs.100 per month is enough. Start a piggy bank or jar at home for coins and notes. Make this a weekly or monthly routine. After 12 months, you will see the growth and feel confident. Small savings habits become big habits.
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» Systematic Investment Planning (SIP)
When you have small savings each month, consider starting a SIP in mutual funds. You can begin with Rs.100 or Rs.500 with many companies. SIP means investing the same small amount every month. It grows slowly, steadily, and uses power of compounding. SIP does not need big amounts, does not need market timing. Discipline is most important. Even if you miss a month, it is okay, just continue next month. Over time, SIP compounds and grows, helping you achieve bigger goals even with small income.
» Why Not to Invest in Index Fund
You may hear about index funds in the news. Index funds only copy the market returns. They have limited flexibility and no expert managers to protect against market falls. With limited research and absence of active management, index fund returns may lose to inflation. Actively managed funds use research, expertise, and smart decisions that try to outperform and protect your hard-earned money. For small investors, expert management protects better and guides better.
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» Helpful Government Schemes
Look for Sukanya Samriddhi (if you have girl children), National Savings Certificate, and Post Office Recurring Deposit. These options take small monthly deposits and are safe. PPF is available for long-term savings. These are helpful for those with low incomes.
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» Health Insurance Protection
If the family depends on you and medical expenses are high, try to get a basic health insurance for your mother and wife. Even a small cover helps avoid medical emergencies affecting savings. Government provides affordable health policies like Ayushman Bharat.
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» Financial Planning – Living with Joy
Saving is not only about money. It is about discipline, hope, and building family security. Celebrate small milestones, like saving Rs.1000 or Rs.5000 in a year. Keep sharing savings goals and progress with family. Teach family the value of careful spending. Encouraging everyone helps save more.
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» Growing Your Income
Try to increase income by learning new skills, freelancing, joining small side business, or helping in local shops. Extra work during weekends, small jobs online, or earning with hobbies (like repairing, tailoring, tuition) bring more rupees to save. Every extra rupee can be saved and invested. Try also for government benefits or support schemes.
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» Reviewing Your Progress
Check your savings and budget every month. If spending is high in one area, try to cut down next month. Small corrections each month save more money. Celebrate each progress. Strong habit of reviewing helps build future confidence.
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» Avoiding High Risk and Loans
Do not go for risky investments, lotteries, or unverified double money schemes. They lead to losses and big troubles. Avoid loans for spending. Loan interest eats away savings. Always use own savings for needs.
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» Why Not Direct Funds
Direct funds can cause mistakes for new investors. There is no guidance, no support, and nobody to help correct errors. It is better to use regular investment plans with professional support. Certified Financial Planners guide you, correct mistakes, and keep your goals on track. It is safer for small investors.
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» More Tips for Low Income Households
– Buy as a group, to get lower prices
– Use local stores, ask for community discounts
– Cook at home, celebrate simple meals
– Repair items instead of replacing
– Keep savings separated from regular spending
– Use mobile apps or diary for tracking expenses
– Participate in community or temple savings programmes
– Always think before spending money
– Avoid unnecessary subscriptions and costly habits
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» Finally
You are doing well by seeking advice and learning. Saving money means building hope for your family. Start slowly, with discipline and care, and savings will grow. Use SIPs, government schemes, and professional planners where possible. Celebrate each small step. Saving and investing will build your future security and happiness.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
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