Youth these days start earning in six digits at the beginning of their career, this at times is equal to or more than the whole life time savings of their parents or the earlier generation. But the financial mistakes they do at the beginning of their career at times cost them the fortune they could have accumulated over the years.
This blog will help you to point and avoid these mistakes, plan your finances and enjoy your life too.
Now I will enjoy, and start saving sometime later
You get a job and you start earning in 6 digit figures. The first thought that comes to the mind is I want to buy things what I always wanted, I will enjoy for sometime and then start saving. This is the biggest mistake we begin our career life with. There is no time as later.
Even if it is a miniscule of your earning, start saving it. Open an saving account first (other than your salary account), once you receive your first payment, transfer some money to your saving account and then start spending. This habit slowly starts accumulating your wealth and also inculcates the habit of saving right from the beginning of your career.
No planning
The attitude, one day at a time, where you absolutely don’t think about tomorrow generally lands you into trouble. Start planning from day one, it need not be a meticulous well drafted and thought about plan, but at least you need to think about what you want in your future, where you see yourself, a little idea about timeline you want to achieve those things.
Setting a target gives you direction to move forward, it gives you a little insight of what you need to start doing to achieve that target. Example can be, by end of this year, I want at least 100k in my account and I want to buy my dream bike by next year. Tangible targets give you more scope to plan in numbers, like the amount you need to save to achieve your set target.
Spending on unnecessary things
Just because I have started earning I will only buy branded things, I will eat only on expensive restaurants. These expenses though sound small and insignificant, when accumulated eats up whole chunk of your savings.
Spend wisely, enjoy your life, indulge in good things, but never go overboard with it.
Living on borrowed money
Many youths today prefer using credit cards instead of cash because in the beginning your pocket doesn’t bear the brunt of expenses and the points accumulations and rewards are quite tempting to let go. But this habit of living on credit and borrowed money later costs too heavily on the pockets. The interest credit cards, personal loans costs charge are so heavy, that they at times wipe you of your complete savings.
Hence, it is preferred to use credit only when necessary and as a simple financial rule says, pay off your credit card bill in full as soon as you get your next salary.
Not investing for emergencies and retirement
Emergencies mostly come unannounced and unwarranted. Only then you realize the importance of saving money that could have avoided the unnecessary stress and the hole in your pocket.
To avoid these, always set a certain amount aside as your emergency fund on a regular basis. Invest into insurance, Mediclaim, don’t wait for any incident to happen to start investing.
