Hey Ciana, “What are your hobbies?” Alex asks Ciana. “Shopping,” replied Ciana. She grabbed the attention of all the family members. Ciana is an Independent girl working for an MNC. Her lifestyle is very luxurious. Earning a good salary and spending it all on her clothes, jewelry, movies all the time. Luckily Alex ignored her answer and said yes for the marriage. Thanks to the expensive clothes and the parlor visit to Ciana. When she is happy, she shops. She shops when sad she shops and to celebrate anything she shops. Shopping is an integral part of her daily life. She buys when she is happy; she shops to suppress her sorrows.

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As time passed, Ciana moved with her same habit of earning and spending. She is still the free bird enjoying her life fullest with friends and family; what an incredible time it was. After a few years, there was a hard blow on the economy, and Alex lost his job due to recession. Ciana’s office informed her that either she has to work for less pay or else look for a new job. As the job market is terrible, she couldn’t even think about the second option. So, she decided to stick to her ongoing job with less pay and no extra perks, which leads to No parties, new clothes, jewelry, and movies. With no savings and no role for her husband, so things are a bit awkward and challenging for her. She sold all the branded stuff she owned before, and the banks blocked her cards due to nonpayment. 

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One day Ciana was in a grocery store to buy the basic needs (Earlier, she used to have a maid and a driver for all this work). One of her friends saw her and took some time to recognize her. Ahhh, maybe because she was not looking that glamorous and dazzling. She moved towards Ciana, and yes, it was Ciana only. They both met and opted for a nearby café to sit. After getting to know Ciana’s condition, Tina decided to help her friend. She gave some golden tips to her on saving and managing funds.

How to Manage Your Salary and earnings for the rainy/hard days:

1. START WITH BUDGETING: The first thing before saving is the planning of your basic needs, such as Utility bills, monthly rent, Fuel, Insurance, groceries, Kids school fees (if any), etc. Always make a list of your monthly requirements/spending in advance before you plan to visit a grocery store. Divide your expenses into three parts:Need/Important, Optional/ Unrestricted, and entertainment/Travel. Nowadays, various apps will help us to plan our Budget Like, Excel sheet, simple diary, mobile app, Bank apps, or desktop. 

Here is the list of the few budget apps for money management (on Android) like AndroMoney, Financial Calculators, Google sheets, Money Manager, My Budget book, My Finances, Wally, Acorns.

2. PLANNING: Once you get your salary immediately, park 20-30% amount in a saving/secondary account for saving. If you don’t know where to put it, the separate bank account is the easiest way, and generally, it has a fixed deposit linked to it, which will give better rates on your money. 

3. STRUCTURE YOUR MONETARY GOALS: Try to divide your goals into three categories: short-Term, medium-term- Term, and long-term goals. Then focus on each one, along with the number of years to achieve each, and the exact amount you will need is it for House, Car, or holidays.

4. INVEST IN RIGHT TOOLS: I am sure the most significant dilemma you will be facing is where to invest the money. Start with Recurring deposit or fixed deposit. Once you realized your target, then plan for converting your savings to investments. Then take into thought other factors like returns, liquidity, and tax liability before choosing an asset class. Do not blindly take advice from anyone but conduct your research about the market before finalizing anything.

5. SAVE FOR THE CRISIS: Some so many people are in the excitement of making money, the urge to buy expensive things, and willingness to save for the bigger goals the new earners sometimes forget the preparation for financial traumas. When anything sudden happens like the loss of a job, medical contingency, or unexpected financial support required by a family, they have to be ready for eventualities. So the first thing you should do, even before you start saving for minor goals, is to form an emergency corpus. It should be equal to 3-6 months of your household expenses and should also include any loan refunds and insurance premium responsibilities. This amount should be in such a manner that it will be accessible. 

6. AVOID DEBT TRAPS: When you will start earning, you will surely opt for the credit cards. There are so many scammers out there who steel the data and try to trap the people. Please do not share your details with any fraud like OTP, CVV, etc. Be careful if you are using credit cards; remember that these are useful only if you restrict the credit to one month, and you are paying the bills on time. 

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Apart from these, try for some excellent Insurance, which serves the purpose and optimize long term savings. 

“Ciana, I am sure that you have understood the value of savings and now onwards you will be more careful in the future as well.” I am sure we all have learned something from the insights provided, as financial planning is a must for every one of us.