5 Things to Do When Your First Salary Gets Credited!
If you are a fresher in any field and have worked hard to get here, a heartfelt congratulations to you. If your salary is more than 25,000 per month, then here’s my second congratulations. You are now in the top 10% of India.
This blog is for someone who has completed their degree and secured a good job in a reputed firm. Here are some friendly words to keep your wallet safe and help you avoid regrets in your 30s and 40s.
Make a savings plan:
There are a lot of financial formulas, tips, and tricks on the internet, but the truth in personal finance is personal. Don’t get caught up in that confusion; instead, try out things that suit you well. For example, let’s take my savings formula:
50% – Investing
40% – Needs
10% – Wants
I can see your face! And if you’re a Gen Z, you might even wonder how this works! In my case, I don’t spend much. But you have some goals to achieve and someone might depend on you. Change this plan according to your aim, but if you are a Gen Z who spends a lot on mobile accessories, outfits, and bikes, please invest more in building your career.
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Pay off your Bad debt:
You have your education loan, home loan, or even a credit card loan. Yes, a credit card also comes under loans. Try to pay off these loans as soon as possible because they will affect your future self and might force you to repay the loan by taking another loan. It’s a cycle where your life can get lost.
If you are trying to repay the loan but are stuck wondering which loan to close first, don’t be confused. If you have a credit card loan, pay that off first. Then, use a method called the “snowball effect,” which means closing small loans first. This way, you feel relaxed and motivated to repay others.
Please don’t take unnecessary loans to show off to your friends and family. Of course, you can take a loan to improve your business or start a new business. That’s why I mentioned bad debt in the subheading.
Build an emergency fund:
Building an emergency fund is important after getting your first salary. This salary is your money, and after all these years, you finally have money that nobody can question. However, if you don’t like your job or the company considers layoffs, an emergency fund will cover your monthly expenses for 3-6 months, depending on how much you saved during your working period.
It’s advisable to save 3-6 months of your monthly salary in a fixed deposit or liquid funds. This provides support during difficult times.
Save less, Invest more!
Yes, you heard me right. If you are a young boy or girl, this is the right time to take risks in life, whether in your career or investing. Our Indian parents love to save money, but the problem is that most of our savings are in bank savings accounts, which generally offer only 3-4% interest.
Considering that our inflation rate is around 6-7%, to beat inflation, you need to invest in individual stocks or mutual funds. If you ask which one is better, I suggest going for index mutual funds, where the returns are around 11-12%, which is phenomenal in the long run!
Last but foremost
Always spend money on taking care of yourself, whether it’s on healthy food or a trip to gain mental peace. Go for it. This is the one life you have, so enjoy it to the fullest without spending on unnecessary things. The world has many things to offer for free, so try to ‘live a little.’ Try to enjoy every phase of life, whether it makes you happy or frustrated.
Life has twists and turns at every corner. Face it with confidence and win with consistency!
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