9 Crucial Financial Advice For IT Engineers For Better Future

Financial Advice For IT Engineer

There is a common belief that IT employees earn more and save more. How many of you would agree with me on this? I am sure the number would be on the lower side of the scale. IT industry is no longer lucrative as it happened to be 10-15 years back. If you observe the trend, the inflation every year grows by at least 3% but the starting salary of a software engineer is constant at the same level since eternity.

Whereas this is not an encouraging situation to be in, it pushes us to explore the ways to grow the value of money which is in our hands. Here I would highlight 9 crucial financial advice for IT-Engineers with which you can better manage your hard-earned money.

1. Make Investment a Habit:

Plan to save a part of your salary, be it 500, 1000 or 5000 a month. And then invest it. Ideally, you should start this with your very first salary, if not, sooner the better. An easy and effective way to invest is in Mutual Funds through SIP. You can make this as an automatic deduction from your account through ECS, it will save your lot of hassles. Once you form this habit, both the investment amount and the invested amount are only going to increase over time.

2. Follow the 30-40-30 Formula:

The widely used budgeting formula is 50-30-20 where 50% you spend on needs, 30% investments and 20% wants. But from my researches and my experiences in IT for 15 years, I have learned that we should plan our salary spend in a 40-30-30 ratio. 40% for the day to day expenses, 30% salary in long term investments and 30% short term investments which is easily liquid able for short term goals.

3. Watch Your Expenses:

This thing I really learned from my mom. I used to see her noting down every rupee spent in her diary. Now I understand it’s importance. Tracking our day to day expenses helps us to understand where we are spending more. There are many online expense tracking tools available that make this task easy.

Watching our expenses can help us to see how we can bring our expenses to 40% and increase investments.

4. Create Additional Source Of Income:

If you don’t have other responsibilities or some free time, try to create an additional source of income be it through trading, a small business or any other legal means. You can also start your Blog or YouTube channel which is in boom nowadays. You can check these 6 awesome part-time jobs for IT engineers. This will not only help you to earn some extra bucks but will also help to find your true passion which will certainly benefit in the long run.

5. Spend On Need Basis:

There is a natural human tendency that when there is money in pocket, the needs automatically arise. One must control them and ensure to spend only on things which are required and just not because you have money in your pocket. If you truly have to spend a big amount of money, try to buy assets and not liabilities (sometimes perceived asset, eg, buying a car). Car is an asset that depreciates faster than any other asset so research, examine your needs and invest in it judiciously.

6. Keep Learning:

It’s always good to have a post-graduation degree. But a good course in a decent college can also set you back by 20 lacs in India. So, you must decide whether you really need it, or you are just fascinated by seeing your other friends. Trust me if you have a technical mindset and you are good in it there is huge potential already in the market for graduates.

Instead keep yourself aware of the latest trends and technologies and if of it that interests you and is aligned to your career path, then certainly invest in that course. there are many good online education platforms like Udemy or Skillshare which offers courses at much cheaper rates and have flexible schedules that you can adapt to as per your need.

7. Invest In Real Estate:

Plan to buy a real state property as soon as possible. It can be just land, a 1 BHK house or a bungalow. A saying goes by “money makes money” and the same is applicable for a property. It is a well worth long-term investment that is certain to bear fruit. For plots, you can consider your home town depending on the scope. But do thorough research, analyze the risks and then make a decision. Renting your property is a great source of passive income.

8. Save For Vacations:

Being in IT, vacation is very important to relax and unwind. Also, Social media is playing a vital role in our urge to go on vacation. But many times when we need a vacation, we realize that our bank balance may not allow it. So, plan and take out a small fraction of money every month so that you can go on a vacation in the future without any worries.

9. Do not Keep Resources Idle:

Try and ensure your spouse has a job, if and as long as possible. Be it full time, part-time, freelancing or any small business of her/his own. There would be 2 major benefits – an extra source of income and peace of your mind (just kidding).


There can be disagreements on a few of the points which I totally accept but overall these points are the major influencers on your finances, particularly at the beginning of your career. I hope that if you follow these points, it is certainly going to help you manage your finances in a much better way.

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