Don’t Let Your Salary Slip Away: 7 Money Mistakes To Watch Out For

It’s the end of the month, and your phone buzzes with the familiar notification: “Salary Credited.” While it may be tempting to immediately splurge on dining out or shopping, it’s wise to pause and assess your financial standing first.

According to chartered accountant and tax expert Nitin Kaushik, even individuals earning Rs 1 lakh a month can end up broke if they don’t avoid common financial traps.

In a post on X, Kaushik has outlined seven pitfalls that prevent most people from building wealth.

Check the financial missteps that lead to a debt trap or even leave people with substantial incomes broke.

1) Spending Before Budgeting

One of the most common financial mistakes people make is spending impulsively as soon as their salary is credited. Many end up splurging a large portion on weekend outings and unplanned shopping—often without a second thought.

The fix? Embrace the 50-30-20 rule. Allocate 50% to essential needs such as rent, bills, etc; 30% to wants including OTT, dining out and shopping; and 20% to savings and investments.

2) No Emergency Fund Means Future Panic

Whether it’s a medical crisis or an unexpected job loss, not having a financial buffer can lead to chaos. “A Rs 15,000 hospital bill = chaos if you have zero savings,” Kaushik notes.

He recommends building an emergency fund of Rs 75,000 to Rs 1 lakh, starting with as little as Rs 2,000 to Rs 3,000 per month.

3) Only Saving, Not Investing

Letting your money sit idle in a regular savings account can quietly eat into its potential returns. A smarter approach is to begin investing gradually through a Systematic Investment Plan (SIP). Even a modest monthly SIP can accumulate substantial returns over the years, helping your money grow more efficiently than it would in a savings account.

4) Lifestyle Inflation

Got a raise? Many instantly upgrade to a new phone, fancy dinners and higher EMIs. But as Kaushik warns, “Your salary doubled, but savings are still zero.”

The remedy? Keep your lifestyle steady for at least a year. “Invest the ‘extra’ salary and let compounding do its job,” he says.

5) Impulse Shopping Madness

Spending on e-commerce platforms often appears innocuous, but leads to a gradual and significant drain of around Rs 5,000 each month without you even realising it, says Kaushik. He suggests adopting the 24-hour rule. “Add to cart → wait 24 hours → still need it? Buy.”

6) Unmanageable EMIs

Taking on a Rs 5,000 EMI may seem manageable at first, but it can add up substantially annually, Kaushik cautions.

“Keep EMIs under 15% of your net income.” The CA suggests asking yourself : “Can I afford this if I lose my job?”

7) Not Tracking Where Your Salary Goes

Lastly, the age-old question: “Where did all my money go?” If you’re not tracking your expenses, you’ll never have control over your finances. Kaushik urges you to track every rupee for 30 days, whether using an app or a simple Google Sheet.

He ends his post saying, “Your salary isn’t just for spending. It’s your first investor, your freedom builder, your seed capital.”

Here’s his post:

Managing your money isn’t about earning more; it’s about managing your money effectively to save more. Avoiding common pitfalls, setting clear financial goals and building smart habits early can make all the difference.