🧭 Personal Finance 6 min read·Updated 1 July 2026
Personal Finance 101: The Order of Money Priorities
Personal finance rewards sequence. Do things in the right order and you avoid most disasters — no matter what income you earn.
The order that works
- 1. Build an emergency fund (3–6 months of expenses in a liquid fund or savings sweep FD).
- 2. Buy term insurance and health insurance.
- 3. Clear high-interest debt (credit cards, personal loans).
- 4. Contribute to EPF/PPF for the tax-free base.
- 5. Start equity SIPs for long-term goals.
- 6. Buy a house — only when the EMI fits comfortably and you plan to stay 7+ years.
- 7. Diversify — gold, international equity, real estate — after the basics are done.
The 50/30/20 rule
50% on needs, 30% on wants, 20% on savings + investments. Not a law — a starting frame. Aim for 30%+ savings once income allows.
Frequently asked questions
Should I invest or repay a loan first?+
Repay if the loan rate is higher than your expected post-tax return. Credit card debt: always repay first.
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