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How to do Personal Finance?

# Bank Acronyms:

  • BIC : Bank Identifier Code
  • BSR : Basic Statistical Return
  • CFMS : Centralized Funds Management System
  • IFSC : Indian Financial System Code
  • MICR : Magnetic Ink Character Recognition
  • NEFT : National Electronic Funds Transfer
  • RTGS : Real Time Gross Settlement
  • SWIFT : Society for Worldwide Interbank Financial Telecommunication

# Investment Under Section 80-C

Sr. No. Name Limit Amount
1 Provident Fund 1,50,000 50,000
2 Voluntary Provident Fund
3 Life Insurance Premium 50,000
4 National Pension Scheme 80CCD(1)
5 Pension Plan
6 Housing Loan – Principal 30,000
7 Public Provident Fund
8 National Saving Certificate
9 Unit Linked Insurance Plan
11 Fixed Deposits More Than 5 Yrs
12 Mutual Fund 20,000
13 Housing – Stamp Duty & Registration
15 Post Office Time Deposit Scheme
16 Sukanya Samriddhi Scheme
17 Senior Citizen Saving Scheme
20 Other
Total 1,50,000 150000

Real Estate :

Medical & Insurance :

Education :

  • Education Loan u/s 80E
  • Tuition Fees (For Children Education Only) u/s 80-C

Bank & Market :

  • Mutual Fund u/s 80-C [ELSS]
  • Fixed Deposit for 5 years u/s 80-C
  • ULIP u/s 80-C [Insurance + Investment]

Government Schemes  :

  • PPF u/s 80-C
  • Post Office Time Deposit Scheme u/s 80-C
  • NSC u/s 80-C
  • Sukanya Samriddhi Account (SSA) u/s 80-C – (For girl child )
  • National Pension System (NPS) [Employee Contribution u/s 80CCD(1)] [Employer Contribution 80CCD(2)]
  • National Pension System (NPS) u/s80CCD(1B) (Additional Rs. 50,000)

# Investments :

  1. Term Insurance Plans
  2. Mutual Fund

Module 1 Example : Salaried Person With HomeLoan

Let’s Take an Example of a Salaried Person who gets Monthly Take Home salary Rs. 50,000/-

Income : Rs. 50,000/-

A. Debts [60%] : Rs. 30,000 /-

This includes all your Liabilities such as Home Loan, Personal Loan, Rent etc.

This amount should Not Exceed 60% of Monthly Take Home salary i.e. Rs. 30,000 /-

So, Now We are Left with [40% of Monthly Take Home salary] i.e. Rs. 20,000 /-

Split this amount into your Monthly Expense and Savings Equally.

B. Expense [20%] : Rs. 10,000 /- 

We can’t escape from our Monthly Expenses and these vary month to month. But if we could limit the amount to 20% of Monthly Take Home salary then we could achieve our Saving Goal.

  • Glossary, Fruits & Vegetables, etc : Rs. 3,000 /-
  • Bills & Recharges : Rs 3,000 /-
  • Weekly Expense [Rs. 500 each week] : Rs. 2,000 /-
  • Weekend Expense [Rs. 500 each week] : Rs 2,000 /-

C. Savings [20%] : Rs. 10,000 /- 

This is a chunk of Money we want to save Every Month. More Saving % is always better.

  • Mutual Fund : 10%  –>  Rs. 5,000/-
  • PPF : 2 % –> Rs. 1000 /-
  • LIC : 4 % –> Rs. 2,000 /- { If you are paying LIC Premium Annually then Open Monthly Recurring Deposit }
  • Shopping Saving 4%  –> Rs. 2,000 /- [It is advisable to do saving first and then shopping

# Recommended Books:

Link: EPFO

EPF UAN Services : Link

To Check EPF Passbook : Link

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