Remember the time when you were younger, when you wanted to buy that gaming console but you don’t have the money for it? Now that you’re working and you have the means to buy anything you want, should you? Is it okay to spend your hard-earned money on anything you want, anytime you want it, just because it’s yours to spend? The answer’s quite obvious: no, you shouldn’t. Even when you finally have purchasing power, you should still watch when you spend or invest your money. Don’t know where to start? Check out this list to find out what financial moves you should make now that you’re earning.
Save Depending on Your Long-term Plan
Saving is the obvious answer to your question about what you should do with your money. But it’s a very broad answer that you need to narrow down first in order to have a solid course of action. Are you planning to retire early, or are you looking to work on a normal timeline, up to your late 50’s/early 60’s? If you plan to retire early, you need to save-and eventually, invest-aggressively. If possible, save everything in excess of your daily living allowance (food, commute, rent, and other necessities). You don’t have to worry about budgeting for parties and other recreational activities because you shouldn’t be doing much of that since your main goal is to save up. Again, you’re planning for an early retirement, so you’ll be doing all that partying/travelling/living life to the fullest AFTER you’ve retired.
Now, if you have no problem with the regular working timeline and retirement age at 60, you should still need to save a portion of your salary. Only this time, you’ll be saving for your future family. You also don’t have to deprive yourself of material wants and needs. Travel and experience the world as you like, because you’ll still be retiring at 60, so you might want to enjoy most of your younger years.
Take Out Your First Loan
You might think this is counter intuitive to the topic because one, you don’t want any long-term debt, and two, you don’t need the money just yet. But taking out your first loan, whether you need it or not, can be helpful for you in the long run. You see, credit data providers in the Philippines use this information if you plan to take out a bigger loan in the future. For example, you’ve taken small salary loans when you can, and you pay them on time, always, you’ll have a better credit score and a better chance to get approved for a bigger loan. Also, taking out your first loan gives you a windfall that you can use for many things, like starting a business or a side hustle to earn more and save more. Speaking of side hustle
Invest or Start a Business on the Side
The best time to invest or start your own business is when you still have a day job. This way, you’ll have legitimate ways to fund your business, without borrowing money from your family or for taking out any more loans. A portion of the money you save every month can be allocated to your stock portfolio, or as funds for a small business that your family or friend runs. If you’re willing to take a bigger risk, you can also start your own business. You’ll provide goods and services, while you’re still employed.
These are some of the basic financial moves you can make as a working adult to ensure your future financial stability. While it may seem daunting and overwhelming, at times, it is very possible to achieve financial freedom, one step at a time.