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When you land a job, you may think that all your hard work, both while studying and preparing for interviews, paid off, and it’s time for you to chill and enjoy everything on earth. It is easy to be directionless and free when it comes to money, especially when you have all the liberty to spend the money on landing your first job.
In contrast, this is particularly when you should not get lost with the breeze and stand still by practising a little financial discipline. Getting your first job marks the beginning of your life as an adult, and you need to take extra care on how you organise your finances, so you don’t regret your decisions later in life.
Here are a few actions you have to take upon landing your first job to start a financially smart life.
You might be wondering if it is even okay to negotiate the salary in your first job. You can do that. Before you attend an interview, research the pay scale for a similar position by the company you are interviewing for and other counterparts. Ignore the highest pay for now. If you have the backup of the pay scale, you can respectfully ask HR if there is any possibility for negotiation.
You can specify your skills and mention how these skills come in handy for your job role, and try negotiating. If the HR agrees, well and good! If the discussion doesn’t go as expected, HR would state the performance expectations. You will benefit from this discussion either way.
Read the policies related to the benefits offered by the employer. It may seem boring. But it will be worth the time you spend. When you understand how you can use these benefits, you can put them to use when possible.
Once you are sure of the take-home salary and the other bonuses part of your package, write down the money coming in and the expenses you will have to bear on a monthly and yearly basis. Jot down the goals you are looking at with an approximate time frame and amount to achieve them.
In addition to saving to achieve your goals, an easily accessible emergency fund is of utmost importance for you and your family. Research and choose the savings option that provides relatively high returns. You never know when life turns upside down.
Experts state that an emergency corpus equivalent to the sum required to survive for 3-6 months without worries is the key.
Since you have started earning now, do not leave your education loan or other debts hanging. Create a repayment plan after talking to the bank and try to clear them soon. Make way for the upcoming bigger loans (car or home loan) by paying off the older ones first.
Would you frown if I suggest you start retirement planning when you have just started your career? That’s fair enough. But if you start retirement planning early, you will have a longer time horizon to save for retirement and can feel the magic of compounding in an alluring way.
Further, avoid taking fresh loans for unnecessary things just because you have a monthly income. Check if there is any other way to handle the situation. Planning finances properly from the first step is the key to a good financial future.