How can I keep my expenses under control?

livemint.com:

I am a 27-year-old bank employee. I find myself consistently spending my entire salary each month. Along with a monthly rent of ₹15,000 for my PG accommodation, I also allocate a significant portion of my earnings towards eating out, travelling, movies, and other leisure activities. As of now, I have no dependents. How can I keep track of and control my monthly expenses so that I can start saving and make investments? —Name withheld on request Keeping track of expenditures is the first step in financial planning.

It’s good that you are thinking about it and that should help you move in the right direction. With the reduction of cash for expenses, and the use of electronic means, tracking expenses has become much easier. As you are currently unaware of your detailed expenditure, we recommend following the thumb rule of 50-30-20 as a starting point to set as your target i.e.

50% of your after-tax income should go towards needs, 30% should go towards wants, and 20% towards savings and investment. That way you can manage your expenses better. You can look at using some of the mobile apps to record your expenditure.

Please ensure that you make a habit of recording the expense as soon as the spend happens, especially when it is in cash, as it may be missed out otherwise. Using mobile applications could help you understand your expenditure patterns even through infographics over a period of time, which should make it easier to make changes on certain aspects of your expenses, if needed. Having two savings bank accounts could also help in controlling expenses, with one earmarked as an investment account and the other as an expense account.