Your first proper salary after university lands in your account and, for a brief moment, you feel rich.
Not buy-a-house rich. More like I can order dinner without checking my balance first rich.
After years of student budgeting, seeing a full month’s salary sitting there is a very nice feeling. It’s also slightly misleading. Rent hasn’t gone yet. Neither have your bills. And somewhere in the next few weeks, you’ll probably discover another expense that apparently comes with being an adult.
Before upgrading your entire life in one weekend, give that first paycheque a little thought.
Work With the Money You Actually Receive
A salary figure in an employment offer and the amount arriving in your account aren’t necessarily the same.
Depending on where you’re working, there may be taxes or other applicable deductions. Look at your payslip and understand what’s actually coming in each month.
Use that figure when making plans.
Building a budget around your headline salary is an excellent way to feel mysteriously poor by the third week of every month.
Your Student Budget Hasn’t Suddenly Become Useless
There’s a temptation to abandon every student habit the moment you start earning.
You’ve spent years buying supermarket brands, carrying lunch and debating whether you really need another subscription. Surely you’ve earned the right to stop thinking about all that?
You have. Sort of.
There’s nothing wrong with spending more when your income increases. The problem is upgrading everything at once.
A more expensive apartment, more meals out, new clothes and several new subscriptions can make a higher salary disappear remarkably quickly.
Keep the student habits you didn’t actually mind.
If you were perfectly happy making lunch at home, there’s no reason a job offer has to turn every weekday into a restaurant visit.
Moving Out of Student Accommodation Can Hurt
Graduation often comes with a housing change.
This can mean a new deposit, advance rent, moving costs and buying things that student accommodation used to provide. Apparently, sofas don’t simply appear in normal apartments.
Before deciding how much of your first salary is available for fun, look at what’s happening with housing over the next couple of months.
You may need more cash upfront than you expect.
And don’t feel pressured to furnish an entire home immediately. A chair acquired in month three works just as well as a chair bought on your first Saturday after moving in.
Start a Small “Something Went Wrong” Fund
Once you’re earning, building some emergency savings becomes easier than it was at university.
It doesn’t need to happen overnight.
Set aside an amount you can manage and gradually build it. The purpose is wonderfully boring: car trouble, an urgent journey, a broken laptop, an unexpected housing expense or whatever else life decides to produce.
The nice thing about emergency money is that most months, absolutely nothing happens to it.
That’s the idea.
Remember Any Commitments You Already Have
A new salary can make new borrowing look much more affordable than it did as a student.
Before taking on another monthly payment, remember anything you’re already committed to.
If your overseas education involved financing, understand how repayment fits into your new income and other expenses. People researching financial products in India may encounter banks as well as an NBFC, or Non-Banking Financial Company.
If you’re considering a new financial product, don’t focus only on whether you qualify. You can Check your eligibility against a provider’s current requirements, but meeting those criteria doesn’t guarantee approval or tell you whether another repayment will be comfortable.
Read the applicable interest, charges and repayment terms. Then look at your actual monthly budget.
Being able to borrow and wanting another bill every month are different things.
Decide What You’re Saving For
“Save money” is good advice but a fairly uninspiring goal.
Saving for something specific is easier.
Maybe you want enough to cover a few months of essential expenses. Perhaps you’re planning a trip home, further study or eventually moving into your own place.
You can have several goals. Give them names.
Watching your “flight home” fund grow is considerably more satisfying than watching money disappear into an account labelled simply “savings.”
And Yes, Spend Some of It
Your first salary should not be a punishment for surviving university.
Buy dinner. Replace the shoes you’ve been wearing since second year. Take your parents out when you’re home if that’s something you’d enjoy.
Money is for living as well as saving.
The trick is making those choices after you’ve accounted for the less exciting things rather than before.
That first salary probably won’t make you rich. It does give you something more useful: the chance to start deciding what you want your money to do.
Although ordering dinner without checking your balance first still feels pretty good.
