So, you’re fresh out of college and you’ve got your first job! Congratulations!
The heady euphoria that comes from financial independence cannot be paralleled by even the best vices, and the utter bewilderment as to where your money went at the end of the month can’t be quantified either.
Here are a few tips to keep your hard-earned money in your pocket:
Don’t get a credit card
If you can’t afford something – don’t buy it! Credit cards may seem attractive to you with low interest rates and excellent benefits, young Padawan, but just say NO! At least until you earn enough to not just sustain yourself, but also feed your piggy bank. Credit cards are hard to manage on limited incomes (which is what most youngsters live on early in their careers) and payment defaults and delays affect your credit scores in the worst way. Compound interest and penalties are a surefire way to keep your savings in the negative.
Don’t take a loan
You’ve just started working and you’re probably still at your first job. Unless it’s an emergency, you can’t possibly have something you need so badly that you need to apply for a loan. Find affordable substitutes instead. For e.g. if you need a bike, take the bus until you save up for one.
Don’t get me wrong, loans are awesome if used right, but if this is still your first job chances are you’re trading experience for pay. Taking a loan will tie you down because you will literally be too afraid to quit for a better paying job till your loan’s paid off.
Track your spending
This may sound like the most obvious thing in the world, but you’d be surprised how many people find themselves broke 5 nights before pay day. You may not understand the nitty-gritty of budgeting but in this day and age, as a tech- enabled working professional, you have some cool money management and budgeting apps at your service. All it takes is a tap on your mobile to plan your finances; including keeping track of money you’ve lent friends who are happier than you at landing your first job.
Budget your expenses
What you don’t spend is what you save, and what you save is what gathers interest and that’s how your money grows. Apportion a part of your income for necessary monthly expenses, in cash and allocate a small amount towards entertainment. Don’t draw on your savings account beyond this unless you face an emergency. This will limit your spends and help you earn on the rest. .
Set up a Batman-savings-bank-account
Redirect a part of your salary, based on your budget, to a savings account. Again, all it takes is a few minutes online to compare savings bank account interest rates to find the best place to park your money every month. Don’t opt for a debit card, an ATM card will do in case cash is needed for pressing requirements, like batman to the rescue when you’re stuck in Gotham City.
With these simple steps you’ll have saved enough money to have built a tidy sum for your really important needs that will go with your second job. Like a new car or putting down a higher rental deposit on a better apartment. Saving early is a great way to turn your end-of-month woes into cheers and build a financially stable future.