10 thumb rules for young stars who has just started the working life and earning money.

(1/n)
'Pay yourself first' which means some portion of your monthly income should be saved for future.
Income - Savings = Expense ✔️
Income - Expense = Savings ❌

Study More: Rich Dad poor Dad
(2/n)
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Considering an average age of 25 years to start work life, 10% of post tax income is good to start with. Increase the savings year by year as salary grows. Roughly 10-15% every year. During middle age the savings rate should be 35-40% of your income.

(3/n)
A maximum of 50% can be spent towards living expense such as grocery, utility bills and other living expenses. 20% can be spent for outing, travel, movies etc. 30% should be in savings. Person has to change this allocation based on income and requirements.

(4/n)
If you buy a house try not to pay EMI of more than 40% of net monthly income. If your house cost goes above better differ the decision till the income increases. One can consider of 4-5 times of annual income as house cost.

(5/n)
A maximum of 10% of net monthly income can go for car EMI. Pay as much money you can towards down payment, at least 20% and take the loan for 4 years, not 7 years as lenders allow. If you buy home and car both try not to pay more than 50% of monthly income as total EMI.

(6/n)
Set an emergency fund. 3-6 months of household expenses. Based on the individual’s mindset it may be more. Some people consider even for 2 years.

(7/n)
If somebody depends on your income and their financial goals are linked with your income adequate life insurance is to be considered. Life coverage of 10 times of annual income may be considered and it should be Pure Term Insurance, no benefits.

(8/n)
Retirement fund – 30 times of annual income. Retirement fund will depend on the expense with inflation adjusted. Try to calculate the expenses you can foresee at the old age in today’s times and make it inflation adjusted at the retirement age.

(9/n)
Equity allocation = (100 - age). If you are 25 years old set a 75% allocation into equity. And rest is in debt. If you are not comfortable with direct equity investing go for mutual fund route.

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(10/n)
Some handy tips:
Rule of 72: Number of years to double the money =72/ annual rate of return
Rule of 114: Number of years to triple = 114/ Annual rate of return
Rule of 144: Number of years to double = 144/ Annual rate of return

(11/n)
I always believe that personal finance is more of a personal than finance. These rules are broad in nature and lot to be shaped for every individuals before application.

(12/12)
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