The first income has its joy to spend some on yourself, to fulfill some dreams. But, in this excitement, we make many mistakes, which can become a cause of trouble later on. If you want your income to be better not only today but also tomorrow, then it is very important to avoid some common mistakes. So let’s know what those mistakes are and how to avoid them.
Being completely dependent on only the monthly salary
When you spend your entire salary and keep waiting for the next salary, then you remain in a situation of ‘strapped money’ every month. In such a situation, if any urgent expense suddenly comes up, like doctor’s fees, some household work, or any need of the family, then you can get worried. Therefore, every month, definitely put a part of the salary in savings, so that the same money can be used in an emergency. This is wisdom.
It is very important to keep a proper account of money
If you do not know where your salary is being spent, then the money will end very quickly. So, at the beginning of every month, decide how much money will go towards essential expenses, how much towards savings, and how much towards other things. Make a simple budget, either on paper or in a mobile app, and spend accordingly. This is the panacea for your financial health.
Lack of money understanding
Many a times people don’t know how to manage money properly because we haven’t been taught this in schools. So, it is important to gain some knowledge yourself like reading money related books, watching YouTube videos or consulting an expert. The more you learn, the better decisions you will be able to make. Knowledge is the real power.
Beware of lifestyle inflation
With a new job and rising salary, people often start spending more on themselves, like expensive clothes, gadgets, eating out, etc. This is called ‘lifestyle inflation’. The result of this is that you are not able to save. So, it is very important to understand the difference between ‘need’ and ‘want’ and prioritise needs first. Don’t get carried away by appearances.
Borrow wisely
If you use a credit card or personal loan without any need, then the debt gradually increases. There comes a time when a large part of your salary is spent only in paying the installments. So take a loan only when it is very necessary and repay it as soon as possible! Debt is a slow poison.
Who will support you in difficult times
Anything can happen in life at any time – you may lose your job, you may have to go to the hospital suddenly, or any other problem may arise. At such a time, if you do not have any savings, you may have to borrow. Therefore, keep some money aside from the beginning, so that it can be useful to you when needed. This is your financial security cover.
Today’s savings are tomorrow’s golden future
Often young people think that retirement is still far away, so why think about it now? But if you start investing small amounts from now, then the same money becomes a big fund over time. The sooner you start, the more you will benefit! Tomorrow never comes, start today.