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How you spend your first salary says a lot about you Instead of leaning towards a future of financial uncertainty, it's best to follow these tips for a stronger tomorrow

By Murad Nathani

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Most youngsters spend their first salary without a second thought, because it marks a new beginning of financial freedom for them. A new found land of excitement coupled with infinite spending opportunities and a zeal to have it all, to Carpe diem.Unfortunately, this often marks the beginning of an unplanned future also – where all the money earned is all the money spent, living from paycheck to paycheck, and slowly but definitely heading towards a future laced with financial uncertainty.

Wherein lies the problem? What is the reason behind a majority of our youth being in debt or utterly clueless about managing their finances? The biggest mistake people make is thinking that saving for retirement is something to be taken care of after a few years into one's job – till then spend lavishly and recklessly. Saving early is the biggest favour you can do to yourself, and to your money. After all, we don't just earn money for the sake of earning it. We earn it to help us maintain a good standard of living, and not for as long as we have the job, but after that also.

The paycheck to paycheck life is a vicious cycle: bills to pay, grocery shopping, entertainment quota, and some here and there and boom! Salary has vanished in a puff of smoke. It's a bit dodgy to break this cycle and you have to be really courageous to achieve that. This is how you are going to do it: start treating your own savings account like a bill that needs to be paid monthly, along with your other monthly expenses. You need to learn to pay yourself first.

Close to 76% Indian adults do not adequately understand key financial concepts, found a global survey conducted by Standard & Poor's Financial Services LLC.The extensive survey highlights that India's financial literacy is lower than the worldwide average, but 'roughly in line with other BRICS and South Asian nations'.

Other key findings from India were:-

1) About 39% of the adults who had borrowed formal loans are financially literate, while about 27% of formal loan borrowing adults were not.

2) 26% of the adults in the richest 60% of households are financially literate, while 20% of the poorest 40% of households are financially literate.

3) The income gap is evident when the survey is broken down by concept - Poor adults are 21 percentage points less likely than richer adults to answer the compound interest topic correctly. With regard to interest, the gap is 11 percentage points.

4) 38 percent of adults with tertiary education are financially literate; compared to 30 percent of adults with secondary education, and 18 percent of adults with primary education.

Additionally, the survey also found that only 14% of Indian adults save at a formal institution indicating a weak financial base for most Indians.

I have been observing this lack of financial literacy among the young generation and it has made me want to do something about it. And with a few years of research I have developed a solution – Slonkit. Slonkit is an app connected to a VISA powered prepaid card that can be used both online and offline. The app helps youngsters to analaysetheir spends, save more, spend smarter and also set budgets and goals.

Let's face it: we live in uncertain economic times. Foreclosures, individual debt, and bankruptcies all are on the rise. Hence it is all the more important than ever before to prepare yourself to deal with the financial challenges you are certain to face in the real world.

Here's How to Start Saving Your Income

Figure out how much you can save each month

Set aside a certain amount of money every month. And then, figure how much you can save by cutting back. You will realise you can save much more by simply changing your lifestyle a little. For eg, by bringing your lunch to work or by making less frequent trips to the salon. These could create big savings over time.


Once you get into the full swing of saving, you'll know how much to put away, and where to divert it. As per Wells Fargo, "Split your direct deposit so that an amount or a percentage goes directly into your savings account before you can spend it. Or, set up an automatic transfer for each payday, regularly sending money from your checking account to your savings account. This can help you get used to managing living expenses with what looks like a smaller paycheck, when actually you're building up your own savings."


Ok, good, you've now managed to save up some money. But what do you do with it? Letting it sit in your savings bank account will not do much. So, the next step is to invest wisely. Before you get started with investing, educate yourself on investments first so that you can make informed choices. Begin your investor education at FundsIndia Marketplace, Franklin Templeton Academy and MoneyKraft. You could also seek the help of an unbiased expert financial advisor to ensure you're investing smart and investing right, always.

So, go ahead, make the most of your first salary. Yes, it is just the beginning, but remember this is the time when you learn about your dreams and desires and also carve a path to getting there. A little planning can go a long way, after all, the journey of a thousand miles begins with a single step.

Murad Nathani

Co-Founder and CEO, Slonkit

A self-made entrepreneur, Murad Nathani realised the opportunity of Slonkit as a conglomeration of his own learnings as a consultant and through his personal experiences as a parent. With an MBA from Duke University, U.S.A., Murad began his career as a Consultant with Bain & Company in New York. Most recently, he was a Principal based out of the Mumbai office of Bain and was also a senior member of the firm’s Asia-Pacific Financial Services practice.
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