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First job? Make the most of your salary!

By Shifra Menezes
Last updated on: April 28, 2008 18:15 IST
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I blew it up of course!"

That's what 23-year-old Rohit Shastri, a designer at a web solutions company, did when he got his first paycheque of Rs 8,000 a year ago. "I bought my girlfriend a watch, got myself some cool sneakers and the rest disappeared in discs and drinks."

"I was living with my parents at the time and my daily necessities were taken care of, so I didn't really bother with saving up the cash. But I wound up borrowing quite a bit from my pals towards the end of the month until my next paycheque came in."

That's pretty much how most young people would choose to spend their hard-earned cash -- "You work hard, so you might as well enjoy the money you make!"

Sheetal M took another route. "My first job was with a call centre, just after graduation. I was thrilled to get this cheque for Rs 13,500. It was the most money I had seen, my pocket money would be about Rs 100 a day during college, which I had to really stretch out!"

"But having seen my folks save and budget their monthly expenses, I figured I should do the same. So I sat down with my dad and created an investment plan. We first put down how much I'd need for my regular expenses -- travel, eating out, shopping etc. Then the rest was just savings, which my dad would invest for me every month, so I could get some tax benefits as well."

"Now two years down the line, I have a decent savings and am quite proud of myself for putting some money away."

Somewhere in between Rohit's care-free spending spree and Sheetal's carefully-plotted plan is where most young professionals find themselves when it comes to their first jobs and first paychecks. However, the euphoria of your first pay must be overcome to face more important decisions, decisions that will affect your career and your life.

Asking a friend for a loan was never a big deal in college. You were all a little short of funds so, it didn't really matter. But now that you have a regular 9-to-5 job (or any other for that matter), bumming a couple of hundreds bucks at the end of the month can get a little embarrassing. So plan!

Sure it's a boring task, but getting a head start on your money matters before the big bucks start rolling in will stand you in good stead. How often you go out, how much you spend on a meal, your monthly travel expenses all add up to quite a bit, so track your expenses for a month. That way you know how much you have, how much you spend and where you can cut down if you need to. A monthly budget is a great way to make sure your pay lasts the month and a little longer as well.

Fix a base amount below which you will not let your bank balance dip every month and let it accumulate. It could be Rs 500 or Rs 1,000 or Rs 5,000 per month -- depending on your job and your lifestyle -- the important thing is that you stick to it. This is an easy way to exercise some discipline in your spending habits.

Try cutting down on your expenses as far as you can to make sure that you do not eat into your savings. This way you know you have some money saved up if you want to splurge on a trip or a special gift some time in the future.

"Out of the Rs 6,500 I made at my first job, as an intern at a bank, I'd set aside Rs 1,500 to be invested in a mutual fund every month. My dad suggested the best plans available and then every month the money would directly be taken out of my account, that way I didn't have the chance to miss a payment or overspend."

You don't have to be a money whiz to know where or how to invest! The internet is flooded with information on every possible aspect of investing, so use it to your advantage. Besides, you can always pick your friends' or parents' brains for a little advice.

Investing doesn't have to mean shares, bonds or mutual funds -- although those would be good. You could also invest in some shirts and trousers for work, a decent pair of shoes and bag to match. The way you dress still plays a big role in the impression you create on your colleagues and your boss. So even if it's switching from your raggedy pair of blue jeans to a more presentable pair, this investment does have a pay-off.   

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Shifra Menezes