Money is a medium of exchange — something everyone accepts in return for goods and services. In India that means the rupee (₹). Because everyone accepts it, we can compare the value of wildly different things: an hour of work, a bag of rice, a phone.
Where does your money go?
Most people receive money as income (a salary, fees, or business profit) and then decide how to use it. Every rupee follows one of a few broad paths.
- 1IncomeMoney coming in — salary, business profit, interest, rent.
- 2ExpensesMoney spent on things you consume today: rent, food, travel, EMIs.
- 3SavingsMoney set aside and kept safe, usually in a bank. Available when needed, but growing slowly.
- 4InvestmentsMoney put to work in something expected to grow or produce income — this is where shares come in.
A small but important distinction
Assets and liabilities
Two words run through the whole of finance. An asset is something you own that has value. A liability is something you owe.
- Asset
- Cash, bank balance, shares, mutual funds, property, gold
- Liability
- Home loan, car loan, credit card dues, unpaid bills
Net worth = Total assets − Total liabilities
Net worth is the simplest measure of financial position. It rises when you save or invest successfully, and falls when you borrow more than you own.
Where does your money go?
A salary is not a single number — it is a set of choices. Move the sliders to allocate ₹
Allocated
₹50,000
100% of income
Still unallocated
₹0