A monthly salary of Rs 30,000 remains a typical starting point for many fresh graduates and young professionals. This is generally the standard initial pay scale for employees across sectors like IT, BPO, retail and financial services, among others, in India for most entry-level roles. It may seem impossible to save money with such a modest monthly income. However, financial planning after landing your first job could make a huge difference in securing your future. Even if you start your investment journey with a small amount, it can help you build a sizable corpus.
With a monthly salary of Rs 30,000, reaching the target of your first Rs 1 lakh may initially seem tough. But it can be easily achieved in just 12 months with proper planning and smart money management. Even if you live extremely frugally, maximum realistic monthly savings could be Rs 10,000–15,000.
However, it could be feasible to save around Rs 5,000-7,000 every month with a monthly salary of Rs 30,000. To reach to gold of your first Rs 1 lakh, instruments that yield high returns, such as mutual funds, could be a suitable option.
Let's see if you can invest Rs 7,000 every month in a systematic investment plan (SIP) to reach the Rs 1 lakh goal and how it will grow in 12 months:
Investing In Mutual Fund SIPs:
Monthly investment needed: Rs 7,000
Expected returns: 10%
Total investment: Rs 84,000
Estimated returns: Rs 4,692
Maturity corpus: Rs 88,692
As you can see, it is not possible to hit a corpus of Rs 1 lakh by investing Rs 7,000 every month over a 12-month tenure.
Instead, you can raise the investment amount to Rs 10,000 to build the intended corpus. Let's see how it will help you reach your target:
Monthly investment: Rs 10,000
Expected returns: 10%
Total investment: Rs 1.2 lakh
Estimated returns: Rs 6,703
Maturity corpus: Rs 1.26 lakh
Similarly, if you invest Rs 15,000 monthly (Rs 1.8 lakh in a year), it will grow into a corpus of Rs 1.9 lakh in one year, assuming an interest rate of 10% per annum.
On a Rs 30,000 monthly salary, setting aside a significant portion as savings is crucial. For instance, saving around Rs 8,000 to Rs 10,000 monthly can help to accumulate Rs 96,000 to Rs 1,20,000 in a year.
This requires strict control over expenses such as rent, food, travel, and discretionary spending. Establishing an emergency fund first to cover six months of essential expenses is advisable before aggressive investments.
To accelerate wealth accumulation, investing savings in mutual funds via SIPs could be a suitable strategy. With historical returns on equity mutual funds averaging around 10-12% annually, even a monthly SIP of Rs 8,000 can grow significantly due to the power of compounding.
Before starting your investment journey with a modest income, it's important to remain extremely cautious. It will be a prudent financial measure to evaluate risk factors and your financial condition before choosing investment instruments. You can also diversify your investments across different assets to minimise risks.
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