Your first paycheck is here! What will you do?
Getting your first paycheck gives you power. But, with great power, comes great responsibility. How will you fare? ReadOn
You were offered Rs. 20,000 during hiring. But hey, wait, only Rs. 17,000 has been deposited to your account?!
And, there you were, with a whole shopping list worth Rs. 20,000!
So, why did your employer pay you less?
Lesson 1: Understand your take-home salary
Your take-home salary is often lower than the CTC offered to you because CTC (cost-to-company) includes other benefits such as medical facilities. So, know your take-home salary and plan your expenses accordingly.
Okay. Now you know your take-home salary. And, you can buy all you want! But, it's not enough. That one shoe is staring at you!
So, you borrow money from your friend! After all, the heart wants what it wants :P But, do you see what you just did there? You incurred debt for a pair of shoes, you silly!
Lesson 2: Create a budget
Stick to the 50-30-20 rule of budgeting. 50% for needs, 20% for savings, and the remaining 30% for all your wants. Still got unfulfilled wants?
Push them to the next month.
Getting a paycheck means paying your own bills. You calculate all your bills, except, remember those shoes you borrowed for? Neither were those shoes free of cost, nor was your friend a sweetheart!
Lesson 3: Pay your debts
Prioritise repaying your debts. How about borrowing from another friend to repay this one? Hell, no. Avoid debt traps at all costs!
Are we living in a tax-free country? You wish.
Tax eats away our CTC. But, did you know you could reduce the burden well in advance? You could have extra cash to spend, invest, do whatever you want! Just by proper tax planning.
Lesson 4: Plan for taxes and retirement
While planning for taxes is important, you should also plan for retirement, as managing your expenses will be very difficult when you don't have a regular flow of income.
With the never-ending wish-list, you realize that you are living your life 'paycheck to paycheck'. All your hard work in getting that paycheck gone into drains! You have not saved anything for the rainy days.
Lesson 5: Invest
What good is money if you can't manage it well? Try to regularly save and invest to have enough money for disposal.
Thinking when to start?
Now is the time!
Getting your first paycheck is a great sense of accomplishment. Well done!
But, keeping that money and growing it is what creates real wealth.
We know this journey gets daunting sometimes, even lonely. Worry not! You can book a completely confidential one-on-one session with us! Say bye-bye to your financial and career anxieties. Click here!
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