6 financial tips that you should follow at your first job

Securing a job in the current market conditions has become quite a tedious process given the intense competition in the service sectors. If you have managed to crack a gap through this competitive wall and have successfully secured your first job, then you’ve just reached the base camp. However, the treacherous climb to the peak in the form of financial planning remains in front of you. Even so, there’s no reason for you to get anxious and miss out on the exhilarating thrills of a new job. You can quite easily enjoy your new job, perfect a new set of skills, and socialize with new colleagues if you have taken some time out to plan your finances. 

To help you with financial planning, here’s a checklist that covers everything you need to consider:

1. Make a Monthly Budget
 

There are several budgeting techniques and approaches that you can use to get an idea of your monthly expenses and savings. The general rule is that your essential expenses should be 50% of your salary, your savings should be 20% of your paycheck, while your discretionary expenses can be 30% of your salary. However, if you’re looking to pay off old debts, then the essential expenses can go up to 60-70% as well. On the other hand, if you’re still living with your parents, you can save on food and accommodation costs and your contribution towards savings can increase to even 50%. Making a monthly budget and tracking your expenses can help you avoid splurging on unnecessary items and help you save up.

2. Life and Health Insurance
 

Investing in life insurance during your first job is one of the wiser investments that you can make. Even if you have no spouse or children, it is smart to purchase individual life insurance when you’re young because the premium amounts will generally be lower. On the other hand, if you have long-term plans to stick with your employer, it is better to inquire whether your employer provides life insurance as an employee benefit. If this is the case, then it is much better to go for this option since you will have life insurance without any added costs. Additionally, health insurance should also be on your checklist if your employer does not provide you with one.

3. Provident Fund
 

If you’re a government employee, you will have to contribute at least 6% of your income to a General Provident Fund (GPF) scheme, which you can enjoy tax-free after your retirement. Moreover, a GPF also accumulates interest, which is currently at a rate of 7.1%. However, for other Indian citizens, a Public Provident Fund (PPF) scheme is most beneficial since it also provides 7.1% interest. The money you deposit into your PPF account is locked in for 15 years, and you get a tax exemption on it for up to INR 1.5 lakhs annually. On the other hand, if your new employer employs more than 20 people, then you are eligible for an Employee Provident Fund (EPF). The benefits of an EPF are that you and your employer each have to contribute 12% of your salary to this account, and you get tax exemptions on the entire amount if you withdraw it within five years.

4. Settle Previous Debts
 

Settling previous debts like EMIs and student loans can often take preference over savings when you secure your first job. Ultimately, when distributing your income between savings and settling previous debts, it boils down to your individual career aspirations and family planning ambitions. Nevertheless, this should be an important item on your checklist.

5. Save and Invest Wisely
 

Entrepreneurs and investment experts cannot stress more the importance of investments over savings. This is because when you secure your first job and have no liabilities and dependents, investing is often a better option rather than just saving. To stay ahead financially, you must learn to multiply your money by investing in mutual funds, currency, gold, real estate, or even the stock market. Determining investment objectives and investing early on can be highly advantageous in the long run.

6. Start Early to Enjoy Earlier
 

By checking off all these pain points in your financial checklist, you can be assured of peace of mind that can help you boost your productivity in the new job environment. It is often seen that working professionals who plan their financials early learn to save and invest early in life. Such people reap the benefits of it and are rewarded with a safe and secure future. With the help of services like Metra Trust’s Wealth Management, you can now save and invest easier than ever before. Getting accurate advice on insurance investments from Metra Trust can enable you to stay ahead financially from the first day of your employment life.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Metra Trust or its affiliates to any licensing or registration requirements. Metra Trust shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.