Starting Your First Job? 5 Financial Steps You Should Take

By Adhil Shetty | June 14, 2017

Starting Your First Job? 5 Financial Steps You Should Take

The first job is a big milestone in everyone’s life and the first few paychecks often go towards celebrating this achievement. At this stage of life though not many individuals are inclined to think about their long-term finances.

Regardless of the size of your salary or the overwhelming feeling of financial independence, it’s important to take these essential steps to keep your financial life in order. Here they are.

Get a PAN Card

First and foremost register for a PAN card. A PAN is a unique identity number allotted to every taxpayer by the Income Tax Department. It is needed for filing tax returns and to assign tax liabilities. A PAN is also essential for financial transactions such as receiving salary or professional fees, buying and selling of assets, opening bank accounts, modifying bank account details etc.

Enrol for an Aadhaar Card

The Aadhaar is a 12-digit alphanumeric unique identity allotted to individuals. The Aadhaar database carries your biometric, demographic data. When you register for your Aadhaar ID, you share with the UIDAI such personal information as your name, photograph, age, cellphone number, residential address, etc. This document has gained importance greatly in the recent past as opposed to what it was meant for at the time of its inception. Today, Aadhaar is becoming mandatory for several services, including financial services such as managing your EPFO account where your retirement money would accrue. You also need an Aadhaar number to get an LPG subsidy, a passport, for meeting KYC norms for investments, getting a health card for senior citizens etc. Above all, you now need to link your PAN number with your Aadhaar.

Open a Salary Account

A salary account is a zero balance account opened with any bank wherein you can credit your salary. Your company might arrange for it or you might have to do it on your own. You don’t need to maintain a minimum balance and you also enjoy other benefits such as a free Debit Card, reward points on using the card, higher withdrawal limits etc. You can also use your salary account to open Fixed and Recurring Deposits, pay your bills, and open a linked service such as a Demat Account.

Start A Systematic Investment Plan

Whatever your salary may be, however modest it may be, you should consider saving and investing a percentage of it for your future needs. Mutual funds are an attractive avenue of investment. Systematic Investment Plans (SIPs) are an instrument to help you make disciplined Mutual Fund investments on a monthly basis. Start investing with amounts as small as Rs. 500 per month as you save your first lakh, your first million, and your first crore, which will help you achieve your financial goals. If you invest Rs. 2000 in an equity Mutual Fund with a CAGR of 12%, you can raise Rs. 1.6 lakh in five years or Rs. 1.3 crore in 35 years. Start investing early for best results.

Buy Health Insurance

Another item you must consider adding to your kitty is a Health Insurance policy. This might not catch your attention as you may not be foreseeing poor health or a hospitalisation in the prime of your life. However, illness and hospitalisation may happen to anyone at any age. You don’t want to be unprepared for such an event. Healthcare costs get higher every year, and a sudden hospitalisation could drain all your savings if you do not have health insurance. A health plan would also protect your family members.

It does take some time to be disciplined about money when you have just started earning. But remember that being smart about money is in your best interest.

(The writer is CEO,

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About Adhil Shetty

Adhil Shetty is the Founder and serves as the Chief Executive Officer of Adhil has a Master’s degree in International Relations with a specialization in International Finance and Business from Columbia University in the City of New York, and a Bachelor’s degree in Engineering from the College of Engineering Guindy, Anna University. Adhil is an expert in Personal Finance (Car loan/Home loan and personal loan) and he majorly consults on investment and spends rationalization for the Indian loan borrowers. His guidance is number based with real time interest rate calculations and hence useful for consumer’s real time query.

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