"I earn ₹20,000. How much SIP should I start?" We get some version of this message almost every week, usually from someone in their first or second job, and usually with a screenshot of a fund list attached. The fund list is the wrong place to start. The number is the thing, and picking it badly is why so many first SIPs die inside a year.
So let's do it in the order that actually works.
Two things come before the SIP
This part is unglamorous and nobody wants to hear it, but skipping it is what causes the damage later.
A small buffer first. Not six months of expenses, that's a later project. Just enough to survive one bad month without borrowing: a phone that dies, a trip home you didn't plan, one medical bill. Keep it in your savings account where you can reach it the same day. Until that exists, any emergency turns straight into a redemption, and redeeming three months into a SIP is a miserable way to learn about exit load.
Expensive debt next. If you're carrying a credit card revolve or a personal loan at a high rate, that is costing you a known amount every single month. Clearing it is the one thing in personal finance with a certain outcome. An investment can't promise you anything; a repaid loan already has.
If both of those are handled, or if you're carrying nothing expensive to begin with, good. Now the number.
Finding the number: the month-fourteen test
Ask yourself one question. Not "what can I invest this month", but "what will I still be paying in month fourteen, when the novelty is gone and something unexpected has already happened"?
That's usually a smaller figure than the one you first thought of, and it's the right one. A ₹1,000 instalment that runs for eight years is worth vastly more than a ₹6,000 one that gets cancelled in March.
Here's how the arithmetic usually goes on ₹20,000 take-home. Rent, food, transport, phone, and whatever goes home to family will eat most of it. What's left over is not all investable, because some of it has to absorb the irregular stuff, the wedding gift, the repair, the trip. Take the genuinely leftover amount, and start with roughly half of it.
Half. Not all of it. The other half is what stops you cancelling.
For a lot of people at this income that lands somewhere between ₹1,000 and ₹2,500. If that feels too small to bother with, I'd gently push back: the amount is not the point in year one. The habit is. And the fund houses agree, which is why plenty of schemes accept instalments starting at ₹500.
The mistake almost everyone makes
Somebody reads that you should invest 20% of income, does the maths, sets up a ₹4,000 SIP on a ₹20,000 salary, and feels excellent about it for about five months.
Then a month goes wrong. It always does. The debit fails, then fails again, and the fund house cancels the mandate. Now the SIP is gone, and worse, the person concludes they "can't afford to invest" and doesn't try again for three years. The percentage was fine in a spreadsheet. It was never going to survive a real month.
Start below what you think you can manage. You can raise it in six months once you've watched your own cash flow with the SIP running. That direction is easy. Restarting after a cancellation is the one nobody manages.
Set the date properly, it matters more than you'd think
Pick a SIP date one to three days after your salary lands. The money leaves while the account is at its fullest, before the month has had a chance to spend it.
Anything after the 20th is asking for trouble. That's when the balance is thinnest and the instalment is competing with everything else, and a failed debit is how mandates end. This one decision costs you nothing and prevents the most common way first SIPs die.
Also set your mandate ceiling higher than your instalment when you sign the e-NACH. If you start at ₹1,500 and set the ceiling at ₹1,500, raising it later means fresh paperwork. Set the ceiling at ₹10,000 and start at ₹1,500. The ceiling is a limit, not a commitment, and nothing extra gets debited.
Then increase it, and don't think about it again
Here's the part that does the real work over a career, and it has nothing to do with fund selection.
Every time your salary goes up, put half the increase into the SIP before it reaches your spending account. Half. You still feel the raise, your standard of living still improves, and the instalment grows with your income instead of standing still for a decade.
Investors who've been at this fifteen years almost never say they wish they'd picked a different fund. They say they wish they'd raised the amount sooner. That's the regret, consistently, and it's completely avoidable.
You probably don't need a tax-saving fund yet
Somebody will tell you to start with an ELSS because it saves tax. On a ₹20,000 salary, check whether you're actually paying meaningful tax before you act on that.
Many people at this income aren't, especially once the standard deduction is applied. Locking money away for three years to claim a deduction you didn't need is a bad trade, and the lock-in is real: an ELSS unit cannot be redeemed early for any reason, including an emergency.
Tax-saving is a good reason to choose a particular scheme when the tax exists. It's a poor reason to choose one when it doesn't. Work out your actual liability for the year first, and if it's negligible, pick on horizon instead.
Review once a year, not once a week
Once the SIP is running, the temptation is to open the app constantly. Resist it. In the first year the numbers will move around and mean almost nothing, and watching them closely is the surest way to talk yourself into stopping.
Put a reminder for twelve months out. At that point look at two things: is the instalment still comfortable, and has your income changed enough to raise it? That's the whole review. Everything else in between is noise you're not being paid to watch.
What about which fund?
I've deliberately left this last, and I'm not going to hand you a fund name in a blog post. Anyone who does, without knowing your horizon or how you behave when things fall, is selling rather than helping.
What I will say is that the honest questions are simple ones. When do you need this money? If it's within two or three years, an equity scheme isn't the right tool and a deposit probably is. If it's ten years away, the answer changes completely. And what will you actually do the first time your statement shows less than you put in? That answer matters more than any comparison table, because staying invested is the whole game.
If you want to see how a small instalment behaves over different periods before committing, the SIP calculator is free and takes your own assumptions rather than feeding you one.
Do this today, not this weekend
- Work out your real leftover amount from last month, not an optimistic one.
- Start at about half of it. Round it down, not up.
- Set the date within three days of your salary credit.
- Set the mandate ceiling well above your instalment.
- Diarise a reminder for your next appraisal to raise it.
If you're starting from scratch and want a hand with the KYC and mandate, that's routine work for us and it costs you nothing to ask. Myfolios is an AMFI-registered mutual fund distributor (ARN-145870) working since 2014. Get in touch, or read how we set up SIPs for salaried employees if you'd like to see the whole process first.
