I am 22. I just landed my first job offer with decent pay. I am really interested to know some tips on saving money and investing for the future. - Shayan 

It is good that you are thinking of saving and investing at the start of your career. An early start makes one’s wealth creation journey quite easy. To begin with, try and figure out your essential monthly expenses and try to save 15 per cent of your disposable income every month. Raise your savings to 20-25 per cent as your income improves. Invest before you spend so that savings becomes a habit. 

The first step to investing is to set aside some money, about 6 months’ worth of expenses, in a bank deposit towards any emergencies, such as medical ones. Do get a health insurance plan if you don’t have one from your employer. If you have parents depending on you, buy a pure-term life insurance policy.  

Having done these things, you can start on your financial plan by listing out your goals over the next few years. These goals can be plans to buy a car or a gadget, marry or pursue higher studies. Decide the time horizon over which you would like to reach each goal. For goals that are less than three years away, bank recurring deposits and FDs are good options. For goals three to seven years away, you can consider post office schemes such as NSC, FDs from good quality NBFCs and banks and debt mutual funds. For goals beyond seven years, you can use a mix of Public Provident Fund and systematic investment plans (SIPs) of equity funds. If not sure of your fund choices, begin SIPs in index funds tracking the Nifty100.  

The key to a good savings and investment plan is knowing all the available options and understanding their risks and likely returns. This requires keeping in touch with what’s happening in the economy, financial markets and investment avenues. Subscribe to a good business news portal or newspaper to keep up with changes in the above.