A decent and well-paid job just after completion of graduation makes young adults forget the bigger picture. After a hectic study schedule and job hunting process, the new job thrills the younger generation and pushes them to spend carelessly. While some amount of freedom in spending during the initial months in a job is perfectly natural, any over-stretched pattern is undesirable. A person should try embracing the following tips in order to take better control of finances.
A person, who has just started a job, is surrounded by a higher risk of loss of job or any other emergency. To safeguard against such cases, a person should always aim to save at least 3-6 months equivalent expenses. For example, if a person spends Rs. 20,000 per month then he should maintain at least Rs. 60,000 to Rs. 100,000 in a savings or a debt fund.
Focus on repaying education loan:
Before falling in the trap of credit cards or buying gadgets on loan, a person should concentrate on repaying education loan. The banks have become little stringent on education loan defaulters and thus, one should not take the case lightly.
Time for savings:
A young income earner has fewer responsibilities and thus, enough room to target higher savings. It is a universal truth that the rate of savings are impacted from family responsibilities and with age. Therefore, one should target to save as much as 50% of their income during the early stages of the career.
Spending could wait:
A person, who has just got into a job should overcome the yearning of spending on unnecessary items. For beginners, getting a monthly salary in hand is an exciting life event, especially, if they have been living on meager pocket money before their jobs. But, spending is not a great idea.
Saving is important, but a proper investing strategy is equally important. One should not save and let the money lay idle in bank accounts. Investing the sum into funds according to risk profile is a core task.