3 things to do after you get your first salary..!
You are just out of college, and have landed your first job.
You are now a salaried individual.
What you have in hand is your hard-earned money.
You can either spend this money whichever way you want, or / you
could be smart and save.
Saving
early is the biggest favour you can do to yourself, and to your money.
After
all, we do not just earn money just for the sake of earning it. We earn it to
help us maintain a good standard of living, with ‘maintain’ being the operative
word here.
Therefore,
while spending recklessly may seem well in line with the motto of ‘Carpe diem’
(seize the day),it could also land you in trouble in the future.
As mentioned in our piece on
retirement savings, the prices of goods rise every year.
What is ‘enough’ for today, may not be enough for tomorrow’s
expenses. This puts you in danger of facing a situation where you have no
resources with which to ‘Carpe the Diem’.
But
this apocalyptic future can be averted. With just a few simple changes to your
money habits, you can easily ensure you always have enough cash without a major
lifestyle overhaul. Here are a few tips to get you started:
1. Set a budget..!
The
first thing you need to do is budget your expenses. Say you’re earning Rs.
30,000 a month – What you need to do is set aside a portion – 20% if you are
ambitious, and 10% if you are finding it tough to save.
Use
the rest as your spending pool. When you prepare your budget, prepare it as
though you only have Rs. 24,000 to spend. This may sound obvious, but the key
is to stick to it.
Tracking expenses to stay within limit should also not be tough in
this the age of smart phones.
You now have a host of apps such as Money view to help you
maintain a budget and manage your expenses efficiently.
2. Control unnecessary expenditure..!
2. Control unnecessary expenditure..!
a.
Spending is good.
That’s
what earnings are for. However, unnecessary and over-the-top expenditure are
not good for your financial health. To help curtail excessive spending, do not
eat out every day. Everyone likes to eat out every now and then. But eating out
at a restaurant (or ordering in) every day is not good for your stomach or
wallet.
b.
Use public transport.
If
you’re in a city that has a good public transportation system, having your own
vehicle does not make much sense – it will just be added expense (fuel,
maintenance, etc.).
Instead,
use the bus or / train.
c.
Make use of sales.
Shopping
during the sales months of June & January, or / during the festive season
could ensure you get more bang for your buck.
There
are many other ways to keep spending in check, like not jumping for a credit
card as soon as you can. But these serve as good starting points.
3. Invest..!
You
have now managed to save up some money. But what do you do with it?
Letting
it sit in your savings bank account will only fetch you a measly return of 4%
per annum, which can also be taxed.
That’s
less than the rate of inflation, which means you are, in fact, losing money.
So,
how does one stop this slow erosion of one’s savings? You can do that by
investing wisely.
Before you get started with investing, educate yourself on
investments first so that you can make informed choices.
The FundsIndia
Marketplace, Franklin
Templeton Academy and MoneyKraft are
good starting points for investor education.
You could also seek the
help of an unbiased expert financial advisor to ensure you’re investing smart,
and investing right, always
Once
you have taken care of these three points, the apocalyptic future we mentioned
will be less likely to occur.
However,
that does not mean you should stop here. As your salary increases, make sure
your savings (and investments) increase as well.
