5 Financial Tips For Young Employees to Save Money

Whether you are starting out at your first job or are planning to start saving for a rainy day, handling your finances can seem a tad daunting. 

Regardless of the size of your paycheck, you can always start savings with an amount that you are comfortable with and watch it grow over time. Business digital content creator, entrepreneur and podcaster, Raj Shamani, tells Cosmo how you can start building your nest egg with the resources at hand:

Have a budget

"Having a budget and actually sticking to it is really important. It lets you know how much money you have and how much money you have spent. If you can't make a budget you will never be able to take control of your finances. So, have a budget and make sure to stick to it."

Classify your needs

"Sticking to a budget becomes easier if you allocate your money from the beginning, even before you get the paycheck. Follow a strict strategy of allocating money to different things. For example, you can plan that 20 per cent of the salary money would be invested or saved, 50 per cent would be used for rent, bills and other necessities and the remaining 30 per cent can be the 'fun money' for your splurges. Make a strategy according to your needs and stick to them." 

Prepare for a rainy day

"Most people do not realise the importance of an emergency fund and feel that it's not required. Life is uncertain and you never know when you need some SOS money. Ideally, you should have at least three month's salary kept as an emergency fund in your savings account."

Do not invest blindly

"If you wanna invest anywhere make sure you spend time to understand where is your money going. Do not invest somewhere just because of the hype about cryptocurrencies or some hot stock in the market. First invest your time to understand what it is, see if you like it and if you like it then only invest in it." 

Never underestimate insurance

"Most young people don't take insurance seriously. I believe that everyone should have their insurance policies in place. It is your backup plan if you should face a health issue or any trouble in the future. We can't afford to compromise on our health and during a medical emergency spending your hard-earned money or borrowing it from someone can add to your problems. Make sure you get insurance for all the expensive belongings you have to save yourself from uncertain situations."