Chartered accountant Nitin Kaushik recently disclosed an unusual encounter with one of his clients who was preparing for a holiday abroad. The client, before leaving for a trip to Italy, requested Kaushik to pay his income tax dues of Rs 3.2 lakh in advance, assuring that the sum would be reimbursed within a month.
Kaushik described the incident as an example of misplaced priorities and poor financial planning, and used the episode to highlight lessons for the salaried middle class on the importance of discipline in managing money. Sharing his observations online, he said that a financially secure future required conscious decisions, consistency and an understanding of spending habits.
Living below means
Kaushik advised against reckless expenditure after a salary increase and recommended limiting spending to less than half of one’s monthly earnings. According to him, the true strength of an individual’s financial position lay not in visible consumption but in building savings and investments over time.
Diversifying investments
He cautioned against concentrating funds in one asset class and suggested dividing investments across different channels. These included systematic investment plans in mutual funds, sovereign gold bonds or digital gold, retirement schemes such as the National Pension System (NPS) or Public Provident Fund (PPF), equities and exchange-traded funds depending on risk capacity, and exposure to cryptocurrency only for those who fully understood its volatility.
Secondary income sources
Kaushik emphasised the need to create additional streams of income. He pointed to freelancing, consulting, teaching online, or developing content on platforms such as YouTube as practical avenues. He added that a spouse’s earnings should not be treated as a fallback plan, but rather as an emergency buffer.
Insurance cover
He described neglecting insurance as ignoring a financial risk that could undermine years of savings. He recommended comprehensive health coverage for families and a term insurance policy until sufficient personal wealth was accumulated, calling these measures essential safeguards against unforeseen events.
Avoiding comparisons
In his view, many fell into the trap of comparing themselves with others who showcased cars or homes on social media. Kaushik said such comparisons were harmful because people often overlooked the loans and liabilities behind those possessions. He suggested that individuals focus instead on adopting the hard work of peers, not their spending patterns.
Good and bad debt
Kaushik distinguished between loans that added value and those that drained resources. Education loans, reasonably priced home loans with manageable instalments, and business loans with steady returns could be considered beneficial. By contrast, loans for high-end vehicles, inflated property purchases in stagnant markets, or holidays financed on credit fell into the category of harmful debt.
Financial independence
He warned against relying on future inheritances when planning finances. Just as parents did not depend on their children’s income to survive, individuals, he said, must focus on creating independent wealth rather than waiting for assets to be passed down.
Controlling small expenses
Kaushik pointed out that frequent minor outlays on food delivery, impulse online purchases and repeated digital payments slowly eroded savings. He suggested adopting cost-effective habits such as using public transport and cooking at home to address what he called “lifestyle leaks”.
Balancing spending and investment
Kaushik concluded by saying that while life should be enjoyed, individuals needed to maintain balance between indulgence and prudence. Expensive travel might provide experiences, but sustained investments offered long-term financial freedom. The key, he argued, was in finding equilibrium between enjoyment and building wealth.
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