It is the most memorable day or it is the most cherished moment when you receive your first pay cheque. Even before receiving the first pay cheque, the list of items is ready on which you`ll be spending your money. But, you need to be careful about reckless spending. Therefore, in this article we present to you 10 tips you should follow when you receive your first cheque.
10 Tips You Should Follow When You Receive Your First Cheque | Decide on your spending limits
The pay cheque you receive is the “actual” cash. However, credit card isn’t your actual money. It’s just a means for payment mechanisms. Hence, your cheque amount must determine your spending habits and not the limit of your credit card. You should spend only that much amount which you will be able to easily reimburse at the month’s end.
10 Tips You Should Follow When You Receive Your First Cheque | Avoid collection of too many fake assets
Things such as vehicles, TV, smart-phone, air conditioners and computers are not considered as assets. These things are your liabilities as their values depreciate with time. And you have to shell out money for their maintenance at certain time intervals. Therefore, it’s better to avoid such collection of too many fake assets.
10 Tips You Should Follow When You Receive Your First Cheque | Keep investment and insurance plans separate
If you want greater transparency, liquidity and efficiency in terms of better returns then it’s important to keep investment and insurance plans separate. Therefore, don’t purchase policies which combine investments with insurance. It’s advisable to purchase pure insurance plans. This will insure you against unanticipated events.
10 Tips You Should Follow When You Receive Your First Cheque | Borrow carefully
When you decide to borrow you need to be extremely careful. It’s because when you borrow, you tend to spend tomorrow’s unearned money which is also uncertain. Hence, it’s necessary to borrow for an appropriate cause at the right time and right cost.
10 Tips You Should Follow When You Receive Your First Cheque | Start to invest
You should begin investing in a regular manner and stay invested. It’s a right saying that time creates money. Therefore, you should invest in options like fixed deposit, shares, mutual fund, property and gold to increase your wealth over a period of time.
10 Tips You Should Follow When You Receive Your First Cheque | Save tax but don’t invest in bad options
Saving tax does hold importance. However, one should not invest in bad schemes just to save on taxes as it will cause more burden later. Also, it’s important to begin your tax planning from the year’s start.
10 Tips You Should Follow When You Receive Your First Cheque | Stay away from false impressions of complicated products
It’s important to stay away from false impressions of complicated products that claim to give better returns. Simple plans such as an easy mutual fund plan, an easy term plan or a medical insurance plan perform better than complicated ones.
10 Tips You Should Follow When You Receive Your First Cheque | Invest with prudence
Different investment options require different approach in terms of investments. For example, it’s better to invest in shares with the help of experts as the risk factor is very high. On the other hand, mutual funds are more economical, mutually beneficial and convenient options universally.
10 Tips You Should Follow When You Receive Your First Cheque | Don’t get persuaded by rosy promises
You should not get persuaded by ads which promise higher returns which later turn out to be false.
10 Tips You Should Follow When You Receive Your First Cheque | Understand Personal finance
Personal finance isn’t a hard subject. In fact it’s a lot simpler than those trigonometry problems and chemical reactions in science and other complicated subjects one learns in school & college. Hence, it’s important to “invest” quality time in understanding money matters, before “investing” your hard earned money.
Hence, now you know the tips you should follow when you receive your first cheque. These tips are universally applicable for any age group.