Saving money is absolutely crucial. You’ve heard your parents say this over and over again, especially since you got your first salary, right? Well, they’re right. It might seem completely okay to spend every penny you earn every month, but you need to start setting money aside from the day you get your first salary. Eventually, maybe 10 years or 20 years or 30 years from now, you will need that money. You may be wondering how to save money on a beginner’s salary, but it is possible.

The ideal percentage of saving is supposed to be just 20 percent of your monthly salary. If that feels too much, calculate how much you spend on eating out or going out with friends. If you order in or eat out twice a week, and spend an average of Rs 500 each time, you would be spending Rs 1,000 in a week. In a month, that would be about Rs 4,000. If you cut that by half, you would save Rs 24,000 in a year + interest.

Here are a few great options for people who are just starting their careers and need to know where and how to save money.

1. Open a Public Provident Fund

Ask your bank if they have the option to open a PPF. If they don’t, find a bank that does (which is nationalised banks and a couple of private banks as well). You can choose to have a fixed amount of money deducted from your account automatically every month. You can also choose to put money in your PPF manually, so that you can put an amount that you’re comfortable with. The limit for an annual investment in PPF is Rs 1.5 lakhs. It’s safe, has a lock-in period of 15 years, and offers a nearly steady rate of interest. You can start with an amount as low as Rs 500 every month and increase it as you become more financially secure.

2. Put a small amount of money in a recurring deposit

Most banks in India offer recurring deposits now which is a great way to save money and earn interest on it. Recurring deposits can be made for varying amounts of time. Unlike a PPF, you don’t have to lock in your money long term. Start with a recurring deposit of two or three years. Set an amount that you know you’ll be comfortable putting away. Even Rs 1,000 a month is great to start with. All banks will have interest rates on their websites which vary with tenure. Choose the tenure that gives you the maximum interest rate. The monthly investment amount in recurring deposits is deducted from your account automatically.

3. Invest in long-term mutual funds

Ever heard “mutual funds are subject to market risk”? That’s true. There is a small risk involved in mutual funds but that gets diminished if you invest in long term mutual funds. The process of finding the right mutual fund for you can be intimidating, so take help from someone who already does this or a relative’s accountant. You can also contact your bank’s relationship manager who can help you with long-term options. The fluctuating monthly interest rates won’t matter if you invest for 20 years. These risks become real in short-term investments which may promise higher returns.

4. Get a life insurance policy or pension plan

Check websites like policybazaar.com to compare policy options. Most life insurance policies will have a minimal annual and monthly payment. Here too, you can start with an amount that you think is comfortable for you. More than insuring your life, these plans help in long term saving which won’t affect your monthly expenditure. When they mature after 15 or 20 years, and you’re at mid level in your career, you will really appreciate the sudden windfall of money.

5. Check for a Provident Fund in your company

Most companies include a PF (Provident Fund) component in your salary package. However, some companies offer the option of opting out of the PF scheme and getting more cash in hand at the end of the month. That option sounds very tempting to most people. After all, who doesn’t love more money? But to make sure that you have money even when you retire, take the PF option. EPFO (Employees’ Provident Fund Organisation) requires employers to contribute into each employees’ Provident Fund account. The interest rates are great, it’s a long term savings plan, and you don’t have to worry about keeping track of monthly payments. Just make sure you have your UAN login details and check your balance occasionally.

6. Lastly, make a ‘fuck off’ fund

This is very, very important. Since most sensible investments are long term, and have lock-in periods, you can’t withdraw money from them without a penalty. This is why it is important to have a savings account that you don’t ever touch unless it’s a dire emergency. This is popularly known as a ‘fuck off’ fund. At some point in your life, you might incur a serious situation which needs immediate action. Whether you want to quit a terrible job, move out of a bad house without notice, or leave a bad marriage or relationship, you need a ‘fuck off’ fund to fall back on. Even if you put Rs 1,000 a month into this account, you will have saved Rs 12,000 in the first year of your employment. If you ever need to walk out of a situation, this fund will be your safety net.

Today, after work, go buy groceries (only as much as you need), cook your own meals (the taste will improve with time, trust us), and save money by not spending on eating out. Think of your financial independence and how far Rs 2,000 a month can go if you invest it instead of spending it.

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