22 October 2020 | 5 min read

6 Money Saving Tips For Young Earners


When I first started working at the age of 21, I was under the impression that you can always put off saving for future, at an age of say 25. Of course, little did I know that it was a very wrong impression one can have when starting a new job. Straight out of college and ready to see the world and live for themselves, young earners today hardly have financial independence or budgeting on their mind. And this scenario is only exacerbated by the rampant and blatant consumerism that has “consumed” (pun intended) our lives.

Thus, it becomes extremely difficult to cultivate good financial habits early on in the job. But it is the best and often the right thing to do, provided you do want to have a financial stable and rewarding future in your 30s and later in life. If you are just starting out on your new job, you are at the right place as we put down fine points on why you need to start saving right from your first job. The impulse to procrastinate and just “let it be” can be hard to resist but if you want a cushion to keep you afloat in dire times, it is inevitable.

There are tons of blogs that elucidate on money saving tips to give you a head start when it comes to organizing and getting your financial situation in order. Most of the time, we fail to look and ignore the advice of our parents and older siblings. Don’t do that! Sit through these conversations, learn from people who have been doing it for eons and finally educate yourself as per your times. For starters, you can keep these simple yet prominent points in mind when you start out on your first job and need a little guidance.

1. Save, Save and Save A Little More

Save more money

You may have guessed it, but it needed to be said again – save, save and save aggressively. The habit of saving, when cultivated at a young age stays with you for long and your urges to spend impulsively will wear off over time when you see all your savings accumulating and giving you hefty returns.

Every month, the first saving option you have is to create a budget for an entire month. Divide all your spending into essentials, non-essentials but requisite and entertainment/miscellaneous. Once you have done this, the surplus amount you have can be directed to your savings account or if you don’t have anything left, you can consider cutting down on your miscellaneous expenses and saving a few bucks from it.

Remember, the idea is to just start, however small the amount (even 5% of your salary), you should start saving from the first pay cheque. This will put you way ahead in the game of securing a financial future for yourself.

2. Pay Off Your Debt And Don’t Fall In the Debt Trap

Pay your debt

When you are starting out, you may have student loans to pay off. If you don’t, you are fortunate and don’t have the additional task of paying it off. Thus, clearing all your debts should be a priority and is one of the top saving tips you should imbibe in your life.

For those, who don’t have any debt, steer clear from lure of credit card. If you can be mindful of your spending and pay off all the debt in one go, you may go for it as a financial buffer in case your salary is delayed or other such mishappening but always pay your credit card debt in full and don’t fall in the debt trap by paying just the minimum amount every month. For the uninitiated, it gets compounded and becomes a big nuisance. In a nutshell, just Be A Lannister!!

3. Start Working On Your Financial Goals

Work on financial goals

Whether you want to get married in a few years, buy your first car, go on that dream vacation in Europe or some other destination, whatever it is that aligns with your goal will need money.
And if you don’t want to rely on your credit card for last minute expenses, make sure you start planning your financial goals and sticking to them. All of this would help you make the right choices, save, and invest in the right instruments.

Open a Savings Account with digibank by DBS . Completely transparent, online, and instant approvals with good interest rates make it an amazing place to start your new savings account.

4. Start A PPF, NPS And/Or SIP

start investment

When it comes to investment, there are plenty of tax-saving vehicles like PPF – Public Provident Fund which are government sponsored and completely tax-free and NPS – National Pension System which is an excellent vehicle to start your contribution for your retirement corpus.

There is also the SIP for people who are not sure about where to invest. Go for a hybrid SIP which is both equity and debt and you will see good returns down the line, despite the inflation.

5. Get The Right And Necessary Insurance

Get insurance

Another important saving tip for new earners is to get a term insurance plan . You may not feel the need at a young age, but it is better to be covered by a life insurance and health insurance plan than to regret later when you do need extra money.

Study, research and educate yourself on all aspects of insurance. There are myriad of insurance plans available in the market, from just the plan to plan + investment vehicle (offering returns) and the ULips. Decide which suits best for you and keep in mind that your insurance plan should provide a good cover and not the highest return.

6. Always have an Emergency Fund

Have emergency fund

‘Go with the flow’ is a popular, glossed up Insta aphorism that may apply to your relationships and other aspect of life but is misleading and downright wrong when it comes to your finances. A lot of people, especially those who feel they are starting out on a small salary, feel that it is okay to live on the cash inflow and just go with the flow. Spoiler Alert: it certainly is not. From unforeseen emergencies to being laid off suddenly, there are plenty of sticky situations where you might need extra cash.

This is why creating and not touching an emergency fund is essential to your peace of mind. This is a buffer that allows you to take a sabbatical or live peacefully for a couple of months in case you lose your job.


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