Managing Personal Finances: A Developer's Perspective

In today's fast-paced world, managing one's personal finances can be a daunting task. This article delves into the experiences of two professionals, illustrating how they handle their earnings and expenses. Whether you're a seasoned professional or just starting out, you can find valuable insights here on how to manage your CTC (Cost to Company) effectively.

Annual CTC and Monthly Expenditure

Let's begin with a 30-year-old individual who earns an annual CTC of 18.5 lakhs post-tax, translating to a monthly salary of 1.25 lakhs. This person manages their salary as follows:

Home loan: 32,000 Part payment for home loan: 4,000 Insurance: 1,000 EB bill: 2,000 Internet bill: 2,000 Personal loan: 5,500 Groceries: 3,500 Mother: 10,000 RD (Recurring Deposit): 10,000 Gold chit: 10,000 (for wife and sister) Mutual funds: 20,000 Remaining balance: 25,000

The remaining 25,000 is spent on miscellaneous items such as online streaming, outings, petrol expenses, clothes, and EMIs for electrical gadgets. By the end of the month, they often have approximately 4-5,000 left over, which they use to make partial payments on their home loan. They aim to close the loan soon. For now, this budgeting plan suits them as they don't have any dependents.

Interestingly, their wife also works and earns around 70,000 per month. However, she has separate financial responsibilities to take care of her family, so they keep their finances separate while also supporting each other as needed.

Budget Management for a Fresher: A 28-Year-Old Developer

Another perspective comes from a 28-year-old living in Mumbai. He earns around 60,000 in hand per month and manages his finances with a strict budget:

Divides his account into three: Salary, expenses, and investment. Invests 40,000 immediately in the first account. Places 20,000 in the second account for daily living expenses.

Living in a shared residence (PG), his basic expenses include:

Rental: 7,000 Electricity, WiFi, and maid service: 1,000 Food: 5,000 Transport: approximately 1,000 Miscellaneous: 2,500

He lives five days a week and travels to his workplace, which is roughly 5-6 km away. He uses public transport and occasional walking to keep his transport expenses low. At the end of the month, he typically has around 3,000 left for other expenses. This strict budgeting approach allows him to avoid unnecessary purchases and invest more in the long run.

Adapting to Changes in Financial Situations

Recently, the 28-year-old has seen an increase in his in-hand salary to 75,000 and has adjusted his investment accordingly. He now invests around 52,000 every month, maintaining a consistent budget and allocation for expenses.

Conclusion: Smart Financial Planning

Both examples highlight the importance of budgeting and making deliberate decisions about how to allocate one's CTC. Effective budgeting not only ensures financial stability but also helps in achieving long-term financial goals. Whether you're managing a significant monthly income or a more modest salary, the key is to prioritize savings, investments, and essential expenses.

About the Author

Our authors are professionals from various backgrounds, sharing their financial experiences and tips. Feel free to reach out or comment with your own stories and questions.