Stepping into your first job is indeed an awesome and an unforgettable moment. This phase of life brings a whole new sense of freedom, responsibility and confidence.
This could be the moment that you have been waiting for all your life. Most of us dream of buying a car, or taking a nice vacation. And now that you have a job all set to give you a consistent financial flow, you would like to realize this dream of yours.
A disciplined and planned approach can get you to realize your dream without draining your pocket. While taking a loan is not a great idea, here are few things that will keep your income safe while allowing you to enjoy its pleasures.
Plan on repaying your educational loan
In fact, avail any loan only when you are certain of repaying it at the right time. Educational loans come with an EMI holiday period, otherwise known as moratorium period, which is usually one year after the completion of the course duration, to help the student avail a job and settle in his/her career. Start paying the loan on the EMI holiday itself. Reason – all the interest during this period will accrue and thereby making you lose more by repaying interest on the loan availed. Certain banks as a matter of fact offer concession of 1% to 2% on the interest rate for the payments during the moratorium period. Borrowers also need to be cautious that non-repayment of educational loans could harm their credit scores and cause great damage to their loan eligibilities for future requirements. The brighter side of availing an educational loan is that it helps you to get tax benefit under section 80E of Income Tax Act.
Keep a track of your expenses
It is most natural that you would begin to earn more than what you used to get as pocket money from your parents for expenses. But let this financial freedom not get you carried away as now you have a bigger leverage to spend on with no authority to question it. An ideal method of developing a strong discipline is to transact digitally as it is easier to follow and understand your spending habits. Always track down the fixed commitments such as loan repayments, household expenses, fuel and food etc. and figure out on the size of the funds that you can now save apart from what you have budgeted for as miscellaneous expenditures. Ensure that there is always a discipline in your spending ways so that you do not deviate from your saving plans.
Chart a focused saving plan
It is very important to plan and save only what you can consistently practice and increase from thereon or it sure would be a foiled savings plan of action. Now that you have decided on the size of savings after meeting all your expenses including household, liabilities and other discretionary expenses, scout for a perfect plan according to what you wish to achieve with that investment. Options vary from short term to long term tenures and between shares, to mutual funds to fixed deposits. Introspect thoroughly based on your goals and invest in a plan that fits you best. Apart from this, it is also important that you maintain a minimum of 6 months of your salary as your permanent balance in your bank account as a contingency plan. Ever wondered of an emergency where you might need a huge sum of money in the next one hour? Or what if you were to lose your job overnight? Plan and prepare for those uncertain moments too! Try to save whenever and wherever you can.
Set a financial goal
Always start with a small step. Do not aim for a big one over a long tenure as it would only make you feel bored with no sense of achievement. Aim for a small goal initially. Calculate as to when you wish to achieve this and how much you would require. Set a plan and achieve it. This would settle a sense of financial confidence and will now help you make a better plan.
Get insurance covers
Let’s assume that you have created a sizable savings of 6 months of your salary as well as a disciplined and focused investment plan. During a medical emergency, your contingency savings would sure help you, but what about critical illnesses which require longer treatment durations with repetitive expensive spends? It in fact should be your prerogative to get yourself and your beloveds covered under insurance plans that best suit their age and different healthcare needs. Similar to your investment plans – scout, introspect, understand and decide on a plan that would best take care of all your family health needs.