Six Things To Do In The First Year Of Your First Job

  Author: Jai Prakash

Six Things To Do In The First Year of Your First Job

Now, that the heady celebrations of getting your first pay cheque are over, you can get back to life as usual. Or, you could some smart things so that your finances remain on a firm footing and you need not have to ask your parents for money. Here, are six things that you must do in the first year of your first job.

Spend prudently Before you roll your eyes and look skywards, allow us to make a distinction between being prudence and abstinence. In early work life, it is important for you to prioritise your expenses and make distinction between what you need and what you want. This will help you ensure that you always have money for the most important things. It will also ensure that you get to have some of the things you want, like the latest smartphone, but after some planning. It is here that making a home budget helps since you manage to live within your means and don’t accumulate expensive debt like that of credit card.

Create a contingency fund To protect yourself uninsurable emergencies such as some medical emergencies or a sudden job loss, create a contingency fund. Often accumulating saving worth three months of expenses is more than enough. You can park your money in a mix of sweep-out bank fixed deposits and liquid mutual funds.

Secure yourself Even early in your first job, you might have people financially dependent on you like your aged parents. Secure them with adequate life insurance. Buy a low premium, high life insurance coverage providing term plan. Also, ensure that you have health insurance, accident insurance and home insurance. 

Borrow prudently This is linked to your spending pattern. Avoid expensive debt to finance your purchases, be it rolling over credit card outstanding or taking personal loans. 

Develop a savings discipline Make investing a habit with regular investment options. You can get started with mutual fund systematic investment plans (SIP) and recurring deposits (RD) from banks. These options help you invest regularly every month.

Go for growth investments To ensure adequate money for future needs, start investing in high growth investments such as equities through equity mutual funds. Over long periods of 8-10 years or more, they typically provide higher returns than any other investment class.

Of course, you can do more than this to move ahead on the financial front. However, you have other important things to do rather than just thinking about and managing your money. That is why you will be amazed to see just how helpful it will be for you to always remember the six things that we have just pointed out.