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Why you should respect money when you start earning

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If you don’t value the money, it’s not going to stay with you in a long-term.

Rahul, 27, hails from Lucknow. After his placement in an MNC, he parents got relaxed as they did not have to worry about his future and his outstanding education loan. But surprisingly after the first salary itself, Rahul changed his lifestyle and ended up spending almost all of it leaving nothing as savings.

This, however, is not just a problem for Rahul, it is more widespread in our society. The behaviour of many youngsters changes when they start earning. They forget the hard times their parents faced and the sacrifices made by them for their child’s education.

As more and more youngsters start getting jobs, there is growing trend where they forget to see the future and do not save for their marriage and children that they would have in future. To make it short, youngsters do not prepare for the many responsibilities that would face in coming years.

If you’re one of them and have just started working, you should ensure that right from the first ‘pay cheque’ you should follow these 5 mantras.

1. Create a budget and include:

How much you earn each month.
How much you pay for essentials like rent, transportation, food etc
How much is left for everything else

2. Think of the future:

If you plan to marry, do remember that you will have to save to meet your expenses rather than further burden your parents.
Plan about the basic necessities that you wold have to provide to your partner like a home, a health insurance plan and other amenities such as a car.

3. Set reasonable goals:

After consulting with your advisor start allocating savings to basic goals through mutual funds SIPs or post office recurring deposits (RDs).
Buy an insurance policy specially term insurance and initially nominate your parents, and change it to your spouse after marriage.
Build an emergency fund which should be minimum 3 months of your household expenses, rent and bills that you pay.

4. Start saving for tax:

Plan your salary and start putting in PPF or Equity Linked Savings Schemes of mutual funds from the month of April itself.
Consult your tax advisor for maximum savings like buying a medical insurance policy, going for a home loan, so on and so forth.

5. Plan for retirement:

Just close your eyes and remember your school days or your childhood. You shall realise how fast the time flies. Never think that you are too young to plan for retirement.

Even if you don’t have enough savings for retirement, I suggest you should at least plan. It shall make you aware about your saving requirements and thus you shall look for other avenues of earnings


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