Negotiating your salary hike while switching jobs and during performance appraisals is something which everyone should try, however such career movements are far and few.
Below tips will help you out to maximise you salary, these tips should work for majority of cases, please consult your financial advisor before you act on them.
Taxes Saved is Money Earned
Taxman is a magician who pockets 1/3 of your hard earned salary by magic wand of law, however it does provide you some leeways and you should make the most of it.
A tax-free component is a more than 30 % saving, if you are in the highest tax bracket.
80C, 80D and Home loan deduction is not enough , so go for that additional 15 % superannuation contribution, 10 % NPS contribution and also 50,000 additional deduction of NPS and avail education loans for your children to get that income tax deduction.
Go ask you HR ask them to provide you with leased car and accommodation as part of CTC and see your take home increasing without having to wait for the promotion
Switch to Direct Mutual Funds
Stop being a lazy investor, there are many of us who are still blindly investing in mutual funds through brokers.
If you can read this you can also do a direct investment in mutual fund and save on the brokerage being paid to your mutual fund agent.
So start moving your existing regular schemes to direct plans and enjoy a higher return irrespective of the actual market performance
Gift Money to Family Members
India is still a thriving family oriented society, where the entire family stays together or atleast act as one economic units
So make use of the tax-free slab of your parents,adult brothers and sisters or kids, Gift them the money and let them do the investments in high taxed products such as Bank FDs and corporate FDs
Start Voluntary PF
This is a very simple act which you can do,I have seen amazing results for people who have started VPF
Though its a fixed income product, the power of compounding and the fact that it gets deducted before you get your salary ensures that it get invested monthly and not withered away
Protect Yourself from Financial Socks
Many families move into proverty due to untimely death of family member or because of serious illness of some family member.
So, get yourself a term insurance, if your family would find it difficult to financially survive without you.
Don’t rely on your organisations Mediclaim for parents as your new company might not offer a cover to them, so get them separately covered.
Also it would be difficult to cover them one they have contracted some age related ailments hence get them a mediclaim when they are healthy
You can save yourself and your spouse and kids from higher premium of medical insurance by going for super top-up medical insurance which will pay for your medical bill after your corporate insurance limit is exhausted
Do remember taxman is your friend here and he is picking up to 35 % of the Bill, So a INR 10,000 premium is actually costing you only INR 6500
Now, Since you have come so long, let me give you a final tip, the objective of life is to be happy and don’t ever forget that in your journey of financial freedom, cheers!!