Remember to spend smart, not spend fast
After years of relying on your parents for financing your expenses, receiving your very first salary is surely a cause for celebration. You might want to celebrate your new found financial freedom by indulging in things that you like.
By all means, do go ahead and celebrate this significant moment. Reward yourself for putting in years of hard work and effort to complete your studies. Indulge in an expensive wallet, handbag, shoes, jewellery or a fashionable outfit. Remembering your first pay with a gift makes it all the more special. Forever etched on the gift would be the glee and delight feel in using the first pay to reward oneself.
After splurging on the things you like, you should then plan to use your salary responsibly henceforth. Here are some tips on setting yourself up for success with responsible use your salary.
1.Paying Off Debts
Tip #1 is to pay off any debt on your education loan. Don’t let the interests accrue. It is not worth it to spend your precious salary on late fees, or interest charges.
Paying off your debt early also helps you feel less burdened and gives you more freedom to spend your money on worthwhile things. You would also gain a sense of financial freedom when you do so.
2.Buying Insurance
Tip #2 is advice to buy insurance as early as possible.
There are benefits when insurance policies are bought early when one is young. You end up paying much less on insurance premiums. Some good policies that would give you a good mileage would be endowment funds that are regular savings plans that grow your money while providing insurance coverage.
This means that there is double the benefit. It is important to save for old age and also for coverage of diseases or disability. Buying insurance is the best way to do so.
3.Saving for Buying a Property
If you intend to live in Singapore, then saving money to buy a house, be it a condominium, landed property or premium HDB flat, is a must.
In land scarce Singapore, everyone pays a premium for property prices. You would need to start saving early as there would be other costs like renovation expenses that would add to the cost of buying a property.
If you intend to get married, then your partner’s contribution would help soften the amount of money that needs to be invested. On the other hand, if you intend to remain single, then you would have to amass a huge savings before you can even imagine affording to buy a property in Singapore.
Tip #3 provides a fail safe way to achieve the Singaporean dream of owning a house.
4.Travel The World
True to the adage, the world is your oyster, Tip #4 is to travel the world. Explore the world and experience first-hand that learning becomes manifold.
See places that you would have never dreamt off visiting. Bask in the beauty that the world has to offer. Come away with a renewed sense of motivation and zest for life. You could backpack and stay in Air BnB or budget hotels to save cost.
Travelling young has it’s perks and advantages. You would be fitter, healthier and more energetic. Exploring the world on a budget string would not be such a daunting task for you. With your nimble feet and tight purse-strings, you would also get to see more for less.
5.Saving Up for Rainy Day
It would be hard to predict when a rainy day might strike. It is wise to be prepared for such a day. Saving up for a rainy day is the final Tip #5.
Setting up an account which automatically transfers money monthly into a savings account would be a wise way to save up funds. The savings would help to buffer the impact on your personal financial situation if there is enough savings to tide over a rough period such as when one has difficulty finding a job or when in between a change of job.
Follow these 5 tips to gain financial security. You might want to adopt a 50/30/20 rule. 50% for fixed costs, 30% spent on living expenses and 20% for savings. One benefit of adopting this rule is that when the pay increases your savings increase too! So start young.
Remember that the one who controls the purse strings is all powerful as he/she controls finances. So give yourself a head start in life by adopting the 5 tips to planning for your salary.