Imagine this scenario, you’ve just moved to a new city, after having landed a new job, and started earning your own money. You’re finally independent, with the freedom to make your own choices and decisions and that feeling is exhilarating, unlike anything else.
However, with adulthood comes many challenges, and one of the most important one, if not the most important one, is about understanding your living expenses in India. The thrill of earning your own money can be short-lived because before you know it, all your money disappears leaving you with a sense of financial uncertainty.
We’ve all seen the memes about running out of money before the end of the month, and as much fun as it is to see those, believe me it’s not a good feeling. So it’s very important to grasp your expenses and budget wisely, and this article helps folks in Understanding what are the elements of cost of living.
I am writing this article with the idea of helping young professionals, to understand the list of necessary expenses that our money goes in, simplifying the process so you can focus on becoming more responsible with your finances, and my aim is to offer a simplified approach, unlike more complex and complicated discussions about cost of living index and calculations, since I do not want to overwhelm you but to empower you with basic financial insights as you head towards this unfamiliar terrain.
Cost of Living Categories
Understanding the living expenses in India for a single person can, in no time, become overwhelming and a maze of confusion, with categories like housing, transportation, food, and entertainment all eying a piece of your paycheck cake.
It is very essential for us to not let all these expenditures can create a perplexing financial landscape and understand the different categories of expenses. Hence, breaking and categorizing these expenses down into manageable chunks can help bring clarity and control.
Alright, so with that being said, let’s do a living expenses breakdown to help you with what to include when planning your budget.
Rent
The first and the most important and significant expense is your accommodation. Unless you have an extraordinary amount of money to buy a place, you, most likely are going to be either renting an apartment, or go for a nice PG.
Whatever accommodation you opt for, it is very essential to find a balance between affordability and the desired level of comfort and convenience. The cost of living in a particular area varies greatly depending on the type of accommodation, location, and amenities, so one very important idea is to consider finding and sharing accommodation with flat mates to split costs.
Food
After you’ve got a place to live, the next expense goes into what you eat throughout your day to day basis. Depending on your food habits, this will represent a significant amount in your list of necessary expenses.
Ordering or dining out on significant days, and those coffee runs before work can add up quickly to your expenses. So planning meals, cooking at home, and limiting all the restaurant visits will definitely help you save money and also make healthier choices.
Utilities
Utilities are a significant component on your list of necessary expenses, so it is very important to set aside a significant amount of your monthly budget towards these associated housing expenses. Utilities includes the likes of your electricity, water, gas, internet, and your cable service.
The amount of your budget that goes in your utilities expenses can vary hugely depending on factors such as location, household size, and your usage patterns. So it is crucial to track your usage and manage these expenses effectively to ensure that you are in a stable financial situation.
Transportation
Transportation costs for young professionals, again takes a huge chunk in your monthly expenses budget. Commuting daily to and from work, or throughout different parts of the city, getting around comes with a significant cost that quickly adds up and becomes a substantial part of your monthly expenses.
Now, unless you own your own vehicle, which is another headache all along with those loan payments, insurance, fuel, maintenance, and parking fees, you are most likely choosing the likes of cab to get you places, which is fine for your weekend plans . But it is a very important practice to rely on public transportation options, like buses, trains, metros and sharing cabs for your daily commuting and consider the most cost-effective and convenient transportation options.
Sports Rent
Now this one is different and I bring this in the list of cost of living factors because it is a very common idea for us to go out and engage in sports activities with our friends and colleagues to have fun, unwind and also stay active. It usually involves booking a sports turf for a game of football, cricket, or a badminton, or basketball court for a friendly match.
We usually plan it every weekend, and it is very important to ensure that these activities remain a source of fun and not financial stress. It is crucial to always make sure to not go over the budget you allot to your sports expense.
Lifestyle/Entertainment
As young adults, we are often consumed by the thrill of having fun and explore new experiences, from lively parties to going on shopping sprees with friends and those cozy nights in with our favorite movies and TV shows.
Social outings, streaming services, and fun hobbies are all part of our well-rounded lifestyle and are a part of cost of living factors. If not managed carefully, these lifestyle expenses can quickly drain our wallets and leave us regretting our choices. So make sure that you strike a balance between living life to the fullest and maintaining financial stability.
Important Living expenses in India for Young Professionals
The above mentioned expenses are obviously not going to be your only expenses to take care of, but are the most crucial ones, since they are your fundamental expenses that are necessary for a young professional to maintain a basic standard of living.
When it comes to managing your finances effectively, it is crucial to understand the average living expenses in your chosen location in order to maintain a basic standard of living to achieve financial stability and security. Chances are, you won’t get it right the first time and will most likely make some mistakes along the way in trying to manage your expenses. The right thing is to learn from your mistakes and refine your approach in order to avoid similar errors the next time.
Conclusion
Navigating the cost of living as a young professional, although quite a challenging process at first thought, is a critical aspect in establishing financial independence and stability. By understanding the various categories that constitute to your list of necessary expenses, you can head towards effectively managing their finances and achieve your financial goals.
So, it is important to remember certain points.
Understand what are the elements of cost of living and make you budget accordingly.
Identify areas where you spend your money and always keep a track of them.
Don’t hesitate to negotiate with your money spending to bring them to potentially lower costs.
Taking control of our finances early on sets a strong foundation for financial success in the future and enables us to achieve our long-term goals.
Also, take a look at the best cities to work for Young Professionals.
