I’m a big spender. So I knew I had to be careful with my money as soon as I started working. If I weren’t, it would all be gone in the blink of an eye. However, I gave myself three months to fully enjoy my salary. After all, there’s something special about spending one’s own hard-earned money.
Once the fun was over, the planning started.
I once read a quote by Warren Buffet that has stuck with me ever since: “Do not save what is left after spending; instead spend what is left after saving.”
So the first thing I did was set up an auto-deduct SIP mutual fund with the help of my father. He helped me identity a low-risk option and I set it up at the bank where I had my salary account. Since first jobs don’t pay much, I decided on a monthly amount of Rs. 2000. It was a small figure, but it was a start.
Thankfully, I was still staying with my parents at the time, so I had no rent to pay. But I did pay my own bills and also contributed a token amount to the household expenses.
A few months later, I bought a life insurance policy. This required me to set aside Rs. 4000 every month. I would spend on shopping, eating out, etc. only after both these forced investments had been deducted and my bills had been paid.
With my salary account came a credit card. I didn’t trust myself with it, so it was safely kept at home to be used only in an emergency. But of late I have started using one, now that I am older and (I hope) more responsible.
When I got a raise, my next move was to put 50% of my salary in a fixed deposit as soon as it hit my account. Not only did this help me save, I also earned interest on it.
So that’s how I managed my finances and built up my savings. I hope you do too!