Rs 2 lakh salary, Rs 30,000 missing every month?: CA warns high earners of money trap and shares where your money could be going

A high salary does not always mean financial clarity. CA Nitin Kaushik has recently highlighted how someone earning Rs 2 lakh could not account for Rs 30,000. This highlights that when money is not given a purpose and spent mindlessly, often goes unaccounted. The CA's salary test examines one's spending habits, loans and investment habits to help earners understand their cash flow and keep a track of it.

Rs 2 lakh salary: Where is the Rs 30,000 gap coming from?

In a post on X, CA Nitin Kaushik described a person trying to explain how his Rs 2 lakh monthly salary was being used. The figures he provided accounted for Rs 1.7 lakh, leaving Rs 30,000 unexplained. That amounts to 15% of the stated monthly income. In the monthly budget, he had allocated Rs 60,000 for EMI payments. Househol expense budget was Rs 35,000. Rs 30,000 was for lifestyle spending. Rs 20, 000 was earmarked for investments and Rs 25,000 for other expenditure.

Before concluding that the money was spent aimlessly, CA suggested checking whether Rs 2 lakh figure referred to gross salary or take-home pay. If Rs 2 lakh was gross amount, then income tax and payroll deductions would explain the difference. If it is the in-hand salary, then the money is indeed being spent without being tracked.

Rs 60,000 EMI and Rs 35,000 household expenses: How much income is already committed?

The person earning Rs 2 lakh listed Rs 60,000 for EMI. For household expenses, he had kept allocated Rs 35,000, totaling to Rs 95,000. This leaves less for leisure spending, investments, emergencies or miscellaneous expenses. While a loan may not be a financial mistkae, but large fixed payments can leave little room for emergencies or increased expenditure or change in income.

CA points out that salary budget should show where the money is intended to go and how much flexibility it allows in case of emergenices or important commitments. Kaushik's broader point is that a salary budget should show not only where money is intended to go, but also how much flexibility remains after essential commitments.

The Rs 25,000 additional expense category could be hiding spending patterns

The man had listed Rs 25,000 for additional expenses, which means Rs 3 lakh over a year. This further makes it important to keep a track on your cash flow. This amount could be your insurance premiums, medical bill, vacation, emergency car repairs, giftings or leisure expenditure. Some of these are predictable and important expenses, while others may be flexible. Grouping them together can make it difficult to identify where spending could be tweaked.

CA's word of advice? Insted of tracking dozens of categories of expenditure, he suggests comparing three figures each month- what you had planned, what you spent and the difference between the two. For example, if the shopping budget for the month was set to Rs 10,000 but you end up spending Rs 17,000, the difference is Rs 7,000. Repeated tracking can help you identify patterns and overspending that may otherwise go unnoticed.