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WANT TO BE FINANCIALLY FREE? CHOOSE YOUR FIRST JOB CAREFULLY

By Vinayak Savanur, Hubballi

Look before you leap is an age-old expression which applies exceedingly well to those who are looking to begin their career. If you are a fresh graduate, you may be faced with several anxieties about looking for that right job. Making it worse is peer pressure and expectations of your parents that you get a good start. Unfortunately, if you do not make the right choice, you may end up in a job that you hate from the bottom of your heart. What is worse is, this job may not even pay you enough to meet your needs.

Money isn’t the most important thing in life, but it’s reasonably close to oxygen on the “gotta have it ” scale.” – Zig Ziglar

The problem of getting the right start:

A good job is elusive for fresh graduates. These hard to come by jobs have forced some graduates to jump on the first opportunity that they receive and settle for far less salary than they require for their life’s expenses. While there is considerable pressure from family and friends to join a workplace as soon as possible, the financial considerations are sacrificed or are not paid heed to in my cases. Another issue is that many young graduates are completely unaware of how much income they should have in order to fulfill their financial requirements. As an example, consider the survey carried out by LinkedIn about young graduates and job satisfaction. Numbers indicate that many 25-33-year-olds are unsatisfied for reasons such as not earning enough, up to 49 percent; buying property is out of reach, up to 44 percent; haven’t travelled enough, up to 43 per cent and under pressure to get married and have a baby, up to 35 per cent of those surveyed. Such deep dissatisfaction can have serious consequences, and some young workers are even driven to suicide.

Getting to grips with reality:

There is a fundamental lack of understanding among many young graduates about their financial requirements. If they make the right carrier move at the very beginning that the causes of their dissatisfaction like not being able to afford a home or being able to provide a vacation can be easily remedied. Having stable finances can also be the key to being able to start your own family without feeling undue pressure. Of course, having a stable and plentiful income is also ample motivation to like doing what you do. If only the youth knew what real life entails financially and how much money they need each month to be able to live well, pursue their dreams and to have some left for savings and investments as well.

All it needs is some planning:

Everyone has different dreams and ambitions, and it is not necessary that you need to have the same things that your friends do, but at the same time if you have some goals, you need the money to pursue them. This requires an in-depth analysis of your life goals and your requirements. Some common goals can be taking care of your dependents (parents or children or spouse), buying a new vehicle, going on a vacation, repaying your education loan sooner, saving up for your marriage or a sibling’s marriage, etc.

Take the example of Manoj Joshi, a 25-year-old from Hubballi who has just joined his first job. He aims to repay Rs. 5 Lacs education loan that he took for his Master’s degree. His loan EMI is approximately Rs. 7000 for a tenure of nearly eight years. Manoj must also support his mom and dad to whom he wants to give Rs. 20,000 each month. He wants approximately Rs. 10,000 for personal expenses as well. Apart from this Manoj has a dream of buying a new car for himself in 5 years. This car would cost him Rs. 7 lacs in today’s money. However, Manoj has accounted for inflation as well and knows that the vehicle would cost him over Rs. 9 lacs in 5 years. So he is saving Rs. 12,665 for his car fund each month as well. This means that Manoj needs a job that gives him minimum cash in hand of nearly Rs. 50,000 or above. An amount less than this would not provide him job satisfaction.

Successful Financial Planning is Simple Financial Planning:

If you want to be prepared for the future, you should be able to analyze your present objectively. In order to find out how much you need to live comfortably, all you need are a few simple steps:

1) Write down your goals: Make a list of what you want to achieve in your life. It could be anything that you think is important to you.
2) Prioritize: Now you need to sort out the goals that are really important and give them high priority.
3) Cost of your goals: You will need to analyze how much these goals will cost you if you wanted to achieve them right now.
4) Time horizon: Factor in the time you will take to achieve these goals. It is important to consider your income as a guiding tool while calculating a time horizon.
5) Account for price rise: Now you must factor in price rise or inflation over the number of years that it will take for you to achieve these goals.
6) Arrive at a cost: Now you can efficiently work out how much money you will need in the future to live the life you want.

Mantra for getting into the right career (Conclusion):

I understand money may not be the all end all, but it is a facilitator. I believe one’s financial requirement is one of the most important steps one should consider before applying/choosing their first job. Once an individual gets a clear idea about how much money he/she would require for fulfilling his/her financial goals/ commitments it will help them to choose the right job or acquire necessary skills to get one. In turn, it also helps individuals to grow in much faster way in their career.

About the writer:
Vinayak Savanur, CFPCM, MBA (Fin) is founder and chief financial planner at Money Min Ting Mantra.

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