Have you got your first paycheque? You must be on top of the world, feeling as if you have owned the whole world or you have achieved something so big that you deserve big kudos. Lots of ideas have already flooded your mind on how you will use this money, but finance experts emphasise the importance of budgeting with first paycheque. You can be in control of your expenses, though it is not that easy.
As a general rule of thumb, you should think about how much money you want to save, but on the contrary, you should think of where you have to spend it. It is very easy to fall into the trap of frivolous purchases in the race of competition to look good or to have the latest gadgets. Building good money habits is not duck soup. Once your habits are built, you will find it harder to change them, and therefore, it makes sense to start spending in a wiser manner as soon as you receive your first paycheque.
How To Stay In Control Of Your Expenses When You Receive Your First Paycheque
Here is how you can stay organised with your spending amid the excitement of your first paycheque:
Be Wary Of Social Media
The first thing you should avoid is too much use of social media. Social media platforms are used to let people know about happy moments that are in disguise. Seeing people buying new items will prompt you to buy new gadgets even though you do not need them. If you do so, you will find it is a harder or insensible choice as it is blocking your money that you can use for a rainy day. One-upmanship is quite evident on social media, and in order to become better than others, people are spending money on inessential needs.
This prompts you to use your credit cards and no guarantor loans for bad credit on benefits, and then your money starts flushing out on hefty interest payments. Soon, you find yourself in a debt trap. Now that you should know the common pitfalls, you should be cautious. The tip: Under no circumstances should you keep up with the Joneses. Realise the fact that people could be less intelligent than you when it comes to making the most of money. Look over your financial circumstances before you decide on buying anything.
Practise Budgeting
Various types of budgeting methods are out there that you should experiment with to see which one best suits your lifestyle and then adhere to that. Budgeting is not about recording all of your expenses to see how much you have spent a month. It is rather a way to figure out how to make the most of your savings by cutting back on your expenses. Budgeting seems like a headache, but you should treat it as your need for self-care, like eating and exercising. Try to review your budget every weekend to see if you are on track.
Set some simple boundaries to whittle down your inessential expenses. Increase your contribution to savings if a planned expense is waiting for you ahead. You will feel motivated when you stick to your budget. The tip: do not stop budgeting even if you see yourself in control of your destiny. You may have to use different types of budgeting methods every now and then, depending on your financial circumstances.
Learn The Basics Of Money
Your money will lose its value over time due to the rising inflation. Your buying power tomorrow will not remain the same as today. Apart from saving money for a rainy day, you should also try to invest money. If you are a babe in the woods when it comes to investing, you should seek safer alternatives like a fixed deposit. Do not forget that you have loan obligations. Be prepared to have a strategy to pay off them.
Try to know how student loans and emergency loans work. What will be the impact on your credit rating, borrowing ability, and finances if you make a default? How should you do up your credit score? How do credit cards work differently from loans? What is a balance transfer credit card? Be familiar with these basics will assist you make better financial decisions. The tip: If you take out a loan, make sure to have a specific expense in your mind. Pay off the debt on time. Avoid rolling it over to prevent your finances from a severe blow.
Learn The Art Of Comparing
Instead of comparing your status with others, you should use the art of comparing when shopping. Be a smart buyer to save money. Even though your pay is handsome, you should spend as little as possible as possible. Going to your favourite store is convenient, but the prices might be higher than the other stores where you do not want to step in. You should check out each nearby store to see if you find any variations in prices.
Nowadays, groceries are also available in online retail stores at lower prices than brick-and-mortar stores. Check the online prices carefully because they are often exaggerated to show hefty discounts. Online grocery makes sense only when you save more money than store shopping. Bulk grocery can help save money, but ask yourself if you actually require that much. Visit different banks to check their interest rates on savings accounts, fixed deposits, etc.
Show your interest in opening an account in their branch so they entertain you like a potential prospect. Do some online research so you have questions to ask them. Likewise, you should do research before availing of a loan and applying for a credit card. Interest rates vary by lender due to added fees. You can save money on interest payments if you act with a little caution. Compare the rates of banks with those of lenders and then opt for a cheaper deal. Haggling is extremely important when shopping.
Whether you are buying an electric gadget or you are buying a piece of furniture, you should always try to negotiate a good deal. You can save a lot of money by haggling. The next thing you should look at is your mobile phone bill. Ask your provider if they can provide you with a cheaper deal. The tip: comparing prices could save little money on various categories of expenditures that add up to much.
Set Up A Direct Debit
In order to save money, you should link your savings account to a pay account so you can transfer money directly from one account to another. However, you can be deceitful, so it is suggested that you set up a direct debit. Try to save at least 10% of your income, and when your income rises, your savings should also proportionately rise. The tip: Be consistent with your savings plan, so you have enough money for a rainy day.
The final word
When you get your first paycheque, amid the excitement, you may end up spending the whole money. Still, experts say you should make the most of it by stopping yourself from comparing yourself with others, setting up a direct debit, and learning the basics of money and the art of comparing.