Personal Financial Learning For Newbie Earners

10 Investments options and Importance of Personal Financial Learning For Newbie Earners

The objectives of personal finance learning for newbie earners are to get them basic financial knowledge and necessary tools that help them to build the life which they envision. This personal financial learning for newbie earners blog will cover the basics about the following 4 topics which are essential for all new earners to understand before getting the first salary in hand.

  1. 10 easy Investment options for newbie earners.
  2. What is Personal financial literacy?
  3. What are Personal financial responsibilities?
  4. How to excellent Personal financial literacy?

10 easy investment options for newbie earners.

Saving and investing our hard-earned money in the right options is one of the important financial decisions of newbie earners. Personal financial learning helps newbie earners to take suitable decisions in selecting investment options among low-risk, medium-risk, and high-risk investments.

In general, bank FD, RD, ULIP, PPF  NPS… are considered low-risk savings and investment options. Equity and market-linked investments like MF and direct equity investments are considered high-risk investments. A combination of market-linked investments and fixed return investments are considered as medium-risk investments.


10 easy investment options for newbie earners.

1. Bank FD-Fixed Deposit & RD- Recurring Deposit.

  • In RD-Recurring deposit, investment is made at a fixed period regularly for the predefined time period.
  • FD- Fixed deposit is the investment in which investment is done for one-time for a specific period of time.
  • For both, the percentage interest rate for the invested amount will remain the same.

2. ULIP – Unit-linked Insurance Plan.

  • Unit Linked Insurance Plans (ULIPs) is moderate risk, a goal-based financial instrument that offers benefits of protection and Investment for the long term.
  • Unit linked Insurance Plan is linked directly to the equity market.
  • It offers flexibility to invest units in debt funds or in equity depending upon our risk appetite.
  • ULIPs provide long term capital gains and also offer a protection cover.

3. PPF- Public provident fund.

  • The public provident fund scheme is a safe and low-risk financial instrument.
  • PPF is mandated by the government and provides a fixed return.
  • The minimum time period is for 15 years and it can be continued.
  • The investment minimum amount is 500 rupees and a maximum of 1.5 Lakh annually.
  • PPF provides the option to avail loan against the amount in the account.

4. MF- Mutual Funds.

  • A mutual fund is a market-linked financial instrument that pools money from a group of investors and put it into a portfolio of financial instruments.
  • The portfolio includes stocks, bonds, and government securities…
  • Buying and selling shares in a mutual fund are doing as units of portfolio.
  • The risk of Mutual fund investment, Is based on the financial instrument on with the units are invested.

5. NPS- National Pension Scheme.

  • NPS is a government-sponsored pension scheme.
  • During retirement, NPS allows investors to withdraw a part of the corpus and use the remaining corpus to buy an annuity of security.
  • NPS helps investors to get a regular income after retirement.

6. Investment in Direct Equity.

  • Direct equity investment is a high-risk investment that will ensure long term growth.
  • Growth of our investment fund based on the way the price of a share of the company performs.
  • Investors are eligible for getting the dividend as and when companies offer it to the shareholders.

7. Bonds come under RBI Regulations.

  • Bonds are fixed-income instruments, hence it is a low-risk instrument.
  • Bonds issued by government bodies or companies to raise capital from investors.
  • During maturity, investors will get back the investment amount with interest.
  • Bonds are available as Fixed-Rate Bonds and Floating-Rate Bonds

8. Gold / Gold ETF

  • Gold-ETF (Exchange Traded Fund), is a commodity-based Mutual Fund investment.
  • In Gold- ETF amount is invested in assets like gold.
  • Gold ETF  investors will get the unit’s equivalent in cash instead of actual gold.

9. Post Office Saving Scheme.

  • Most of the post office fixed deposit investment is for a period of 10 years.
  • It is a low-risk investment and provides a higher return than normal bank FD.
  • The annual interest of the deposit is credited to the investor’s savings account.

10. IPO – Initial Public Offerings.

  • Through IPO shares of a private company are offered to the public.
  • Once the IPO is realized, investors can apply through the Demat account and get it.
  • IPOs help companies to obtain capital through the primary market.

Well thought out decision based on personal financial literacy is needed to select the suitable investment options, which help newbie earners to meet the Personal financial responsibilities.

What Is Personal Financial Literacy?

Personal Financial literacy is the capability to understand the financial principles, which help to manage money effectively and wisely. The essential part of personal financial literacy is knowing how to manage money. To become personal financial literate, newbie earners need to take a step to implement personal financial principles in life.

  • Financial Literacy is important for newbie earners because a proper understanding of personal finance concepts helps them to manage the earning effectively.
  • Money is easy to mismanage, it will lead to a financial struggle in the future.
  • If newbie earners spend time to learn how to manage money and apply those skills in life, they can build wealth easily.

What Are The Benefits of Personal Financial Literacy?

The benefits of personal financial literacy are countless however here are a few important points to the lookout.

  • Net worth will grow continually, irrespective of what you earn.
  • Helps to avoid going into debt, even with lower earnings.
  • Less Financial Struggle in the older ages, even if don’t have any income.
  • Better Household Finances, even in the situation of increasing expense.

What are personal financial responsibilities?

Financial responsibility means having a lifestyle that meets the social standards within means, regardless of the level of income. To succeed in personal finances, newbie earners needs to have a close look at the financial situations, evaluate earning, and make adjustments in the spending habits to match it. As Financial responsibility had a big impact on the future, it is important to expertise on personal financial literacy from an early stage of earnings.

Key points of Personal Financial Responsibilities. 

  • The management of personal finances effectively to meet the financial needs of individuals and family.
  • Meeting the standard of lifestyle irrespective of economic, cultural, social, and technologies.
  • Able to support yourself and family financially for at least six months irrespective of zero income and adverse circumstance.
  • Having an organized plan for saving and spending money.
  • Making the right decisions early in life to become financially independent and having a comfortable retirement life.
  • Understanding the four basic components of finance, like income, Expenses, Assets, and Dept.
  • Having a good understanding of the difference between a Good and Bad Debt

To get expertise in the subject of personal finance, one need to understand personal financial planning concepts and applications. Application of Personal finance includes cash in and outflow, net worth and asset, income taxes, insurance, and consumer debt… A Financially Responsible person avoids Debt and should meet the financial emergencies from the savings or investments.

How to excel in personal financial literacy?

People will spend years getting a degree to get a well-paid career. To manage the earnings from the career newbie earners need proper financial literacy. It doesn’t take years to get financial literacy for beginners. With a focused effort, anyone can become financially literate over the course of a few weeks.

To develop personal finance literacy, newbie financial learners have many options like,

  • Take a paid or free courses online or offline from some experts,
  • By reading a couple of personal finance for beginners books.
  • Learning from YouTube, Blogs, or Articles from any search engine.

5 practical steps to excel in personal financial literacy.

In-spite of learning to become experts in the domain of financial literacy needs to practice the following 5 steps.

1. Track Your Income and Net Worth.

  • The difference between assets and debt tells where newbie earners stand financially.
  • Keep an eye on income and expense help to keep the track of the progress of financial literacy.
  • Manage Money by Creating a personal investment portfolio help to increase the net worth, irrespective of earning.
  • Newbie Earners need to focus on regulating expenses wisely to become Personal financial responsible in society.

2. Set a Budget, time Period.

  • As part of Personal Financial Learning, all newbie Earners should prepare a checklist of expenses.
  • The checklist helps to knockout unwanted expenses and meet the personal budget with within the income.
  • This budgeting is the starting point of for financial goals in life.
  • Proper budgeting help to spend judiciously and deal with surplus cash.

3. Take a Daily Money Minute

  • It is important to spend at least one minute every day to check financial transactions.
  • Now there are many online apps available to manage and monitor our daily expenses.
  • Preparation of money minutes helps to identify overall expenses and keep track of financial goal progress.
  • This also helps to set the spending tone for the rest of the days in the month.
  • In money minutes it is important to add a personal balance sheet and tax paid.

4. Allocate at Least 20% for the future.

  • Planning for Retirement should be one of the prime objectives of Personal financial responsibilities.
  • Newbie earners need to priorities, their savings, and investments.
  • First priority of fund allocation should for building up emergency savings and retirement funds.
  • Managing the debt wisely will help to safeguard the money for the future.

5. Spend at least 10% of Your Income on Lifestyle and fun.

  • Spending the money for lifestyle and fun is an important part of Personal financial learning for Newbie Earners.
  • If we don’t spend the money for the fun, during our retirement age, we may have a corpus of the amount in our hand, however, it may lead to regret about not enjoying life at a younger age.
  • Income for Lifestyle and fun should include movies, outing, travel… ideally anything that doesn’t cover under the basic life


For newbie earners, it is essential to spend time developing Personal financial literacy. through that, they can meet Personal financial responsibilities. Making proper budgeting and tracking the expenses is the fundamental of Personal financial literacy. The goal of every newbie earner should be to have a hassle-free retirement life with financial freedom, as early as possible. Practicing the knowledge earned through financial literacy is an important factor to enhance the skills.

Thanks & Regards.


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Harry J P is a Business development and sales professional passionate about sharing knowledge in the domain of sales, and personal finance which helps in Personal financial learning for newbie earners. This blog came out of the experiences in the domain of personal finance, business development, and the share market.

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