Starting with your first job and receiving your first paycheck is a feat in itself. While spending on oneself is acceptable; however, perennial celebration shouldn’t become a habit. Beginners who have started earning must give serious thought to the whole idea of savings and investment. Because the habits you develop now can significantly impact your financial life and long-term objectives.
So, how to save money from the first job and start investing?
Start with defining your financial goals. You can divide them into long-term, medium-term, and short-term goals depending on when you’d like to achieve them. Setting goals with their timelines makes asset allocation easier.
If the interest rate of your Salary or Savings Account is low, look for the highest interest rate Savings Account. At AU Bank, you can open an instant Savings Account online & receive Monthly Interest Payouts at the rate of 7%* p.a. Switching to a better Savings Account Interest Rate is a simple and effective way to grow your funds.
One of the most effective tips to save money is to divide your expenses. You can consider using the 50/30/20 rule, where 50% of the salary will go towards your needs, 30% is reserved for wants, and the remaining 20% is saved and invested. The set buckets protect you from overspending.
Now that you’ve started earning, you can consider taking a Credit Card. Use the Credit Card responsibly to build a credit history that will make you eligible for products like Home Loan, Vehicle Loan, and Personal Loan in the future. At AU Bank, you get to choose from a range of uniquely curated Credit Cards. Not just this, AU Bank also lets you build a customized LIT Credit Card where you can select & change features as per your lifestyle needs.
The biggest advantage young adults have is “time.” Investment planning should also be high on your to-do list after getting employed. Once you’ve defined your objectives, analyze the available resources, your risk appetite, and accordingly, you can choose to invest in Stocks, Mutual Funds, or Bonds. Early investors can indulge in riskier financial instruments & later on shift to safer options as earning days diminish.
When you start investing, it is wise to stick to safer investment vehicles. For instance, you can consider opening a high interest rate Fixed Deposit (FD) account with AU Bank. It requires you to invest a lump sum amount for a fixed duration to generate high, risk-free returns. Alternatively, you can consider a Recurring Deposit (RD) to make smaller regular investments.
Emergencies come unannounced and often when we’re least prepared. You should consider opening a new Savings Account to create an emergency fund that can be used in situations like job loss or sudden hospitalization.
Once you start earning, getting used to the new life and new responsibilities can take some time. But you should not overlook the importance of saving and investing from a young age as it can help you build a solid foundation for your financial life. So, focus on the ways to save money discussed above to develop financial habits that can deliver lifetime benefits.
It’s time to begin your savings and investment journey. At AU Bank, you can easily open a high interest rate Savings Account, opt for a Credit Card, or invest in a Fixed Deposit. With features like online account opening, high interest rates, Monthly Interest Payouts, and AU 0101 App / NetBanking, AU Bank fulfils the banking needs of modern consumers.