First of all, a hearty congratulations on your new job! Your responsibility towards life has just begun now that you have a job. Infact, you are about to become super busy – if you want to be a happy man with secured financial gains.
Here are some useful tips from experienced professionals on how to handle the first steps of your money management!
Organize your expenses and make a budget
How difficult could it be to follow a budget, right? Just jot down what to do and what not do and you are good. Wrong. A budget needs to be focused on with great discipline and equally great willpower. Make an estimation of your daily expenses by keeping a diary with you and write down every single expense. That way, you will have a fair idea how much you need to go by in a month. Now make your budget and stay strictly adhered to it.
Learn to become self dependent with your financial matters
How many of you still ask your dad to file your tax returns? The most important step towards having a financial future is identifying how to have one. Stop calling your father, uncle or CA friend every time you don’t understand something. Stay in touch with your bank relationship officer, read the financial weeklies and say hello to Google! You can begin with reading some personal finance books.
Pay yourself first
This global finance mantra has become so commonly advised by the professionals that it’s not even worth repeating. No, it is definitely worth repeating because majority of earning men and women still don’t get it. People, it’s highly important to have some money set aside for the rainy and dripping wet days! Granted, you may have credit card debts, education loans etc to pay for but make it a habit to put aside, say, INR 2,000 every month. And don’t put it inside your pillows either, invest it in a high interest savings account like HDFC Super Saver Facility or in a good SIP.
Start thinking for retirement
To the contrary of what you think, after 30s is not the time to think about retirement. The best time is whenever you start earning, which is now. There are various financial solutions to save up for the retirement, PPF being one of them. However less amount you can scratch up, say INR 500 pm, put it in a PPF account. You will be amazed to know how big a corpus it could become if you start in your early 20s till late 50s.
Time to start paying taxes
The legendary moment has come when you have become the not-so-joyous part of taxpayer community. You will need to pay attention to your incomes and file returns at the end of financial year. You can easily do it yourself as online filing of tax returns is not so daunting.
But if you are thinking of saving some tax, then this is the right time to use the tax-saving tools. There are some instruments under section 80c which grant exemption from paying tax such as PPF, ELSS, ULIP and so on. By investing in any of them, you can save substantial sum payable to tax authorities. Your education can also be a tax saver for you!
Most newly appointed job holders can argue that their parents have bought insurance for them since they were toddlers. The thing is you are earning now. And if the Indian social system is anything to go by, soon you will have a spouse and little doting children who will depend on you. Your life insurance will be important for you and them, most importantly. Then, if you buy a vehicle or house or precious artifact, it will need insurance too. Choose any of the good insurance plans in the market but only after reading the terms and conditions stated in fine print.
These are some important things to keep in mind. Rest assured, you have a job now so obviously you will learn new ways to handle your finances better. The only thing you need is to keep your mind keen and open.