I did not know whether to say what every graduate should know or what every doctor, mba, ca, engineer should know. It is what my view is about what every kid coming into the job market should know:
1.The Gross salary that a company offers to pay you and the net salary that you get EVERY month is very different! The CTC – is the cost to the company, the net take home is very different because of provident fund, profession tax, income tax, etc. Also some part of the CTC is paid on a quarterly or annual basis – leave travel, medical, etc. Please understand all this while negotiating / accepting your salary.
2. Do not compare Rupee salary at all: If you have lived all your life in Baroda, Salem, Darjeeling, Srinagar DO NOT be tempted by the HIGH sounding salaries of Mumbai, Bangalore, Delhi etc. The rents at these places, the fast life, the eating out costs, the travel will all leave you with very little money at the end of the month. So do a quick estimate of what you will earn (see point 1), what you will spend and therefore what you will have as a surplus to invest BEFORE you say yes to the job.
3. If you have to change geography for a new job, find out the shifting costs. It should be worthwhile especially if you are not sure whether you will like the new place. Simple? You will be surprised.
4. Make a realistic budget, and compare actuals with the estimate, the difference can be shocking to say the least.
5. Tracking expenses is fine, track cash flow also.
6. If the equivalent of ATM is DAD or MOM, fine. If not build an emergency cash fund. Make sure it has 3-4 months expenses at least. It is a cruel world, jobs do not last permanently.
7. Apply, and keep a credit card and make sure you pay ON TIME every time. Helps you build a credit history. However make sure that you do not splurge and wonder from where you will pay. That can harm your credit card score.
8. As soon as you earn, start saving and investing. Enough articles on this blog covering savings, housing, real estate, investing, mutual funds, life insurance….keep reading.
9. Always nice to use the debit card, but using a credit card and paying off on time teaches discipline like nothing else can!
10. Get some TERM life insurance – remember you are an important part of your parent’s future cash flow requirements. Be careful.
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