There are very few things in life that is as satisfactory as getting a job soon after graduating from University. As such, it isn’t unlikely that entry level employees (aka Executive Trainees) riding on the newly found wave of financial independence, display a tendency to splurge and spend their salaries on things they need and do not need. Unfortunately we all have limitations in life which makes our wants are always limited to choices. It is why no matter how much we earn it is never enough to cater for all our needs. Whilst your newly earned salaries puts you at the tip of financial independence, there are certain financial decisions you may be tempted to make that can put you quickly on the path of financial ruin and take away money that would have been better served for investment purposes. Here are some example;
Debt – The first thing you want to avoid at the start of your career is owing. In the first year of employment, you should endeavor to avoid owing on a mortgage, car payments, consumer loans etc. Whilst some may consider items such as owning a car important financing it with your first year’s salary or upfront is not a sound financial decision let alone financing with a loan.
Burden Of Responsibility – We live in a society where relatives depend on each other for survival. It is hence not inconceivable to expect a sudden need to help others once you start your career. However, it is important to note that helping dependent relatives at the expense of your investment goals is a threat to your financial wellbeing and can even erode the eventual support system you originally set out to provide. You must help dependents but not at your financial detriment. Help does not only come through financial support as such not every one that knocks on your door for money can be assisted.
Consumer Loans – The moment you pick up that plum job and start seeing your bank accounts swell, banks, shops, online stores and businesses that offer all sorts of consumer products will approach you. You will be offered debit cards once you open a bank account and soon after a credit card. All types of promo that lure you into acquiring things you need and don’t need will be offered to you. For those who find it hard being frugal it’s the easiest way into financial ruin. You must try to avoid them except where necessary and start by learning to live according to your means.
Avoid Buying Assets That Don’t Appreciate – This is a rule a lot of us have been told over and over again. Assets such as cars, computers, smartphones, TV’s etc. hardly appreciate however they are an essential part of life. Fortunately, they need not be acquired all at the same time and immediately. Start by acquiring assets that you need the most at the cheapest price possible. For example, rather than splash money on the latest smartphone, why not wait to purchase when the price would have come down drastically. Or instead of buying a tablet that cost as much as your salary, why not buy a laptop that can perform basic computing task at a quarter of the price. Public transport sucks but it is still reliable in this parts and can substitute for a car in the early stages of your career as an Executive Trainee.
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House – Apart from owning a car, getting accommodation is amongst the first things Executive Trainees want to do with their salaries. That is understandable as their new income typically spurs the need for total independence. However, caution should be taken to ensure the urge for independence is not overshadowed by poor economic judgment. Before taking on a house rent make sure your job and income is stable enough to sustain rental payments. Avoid neighborhoods associated with high rents and a higher standard of living as it can rapidly deplete your financial resources and soon find yourself seeking for help from those you recently stopped depending on.
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Fashion – Fashionable items are an irresistible part of life and tend to consume a huge portion of our income. As an Intern or Executive Trainee, been fashionable ought not to be a priority. I made that mistake myself at the start of my career spending a huge chunk of my salary trying to make a fashion statement. However, each time I invested so much in looking good a new trend is quickly ushered in and soon my expensive wears become obsolete as well. Looking back, I realized all I needed was just something nice, basic, time tested and cheap enough to look presentable. I need not spend that much wearing the latest when after all I could have still done that now that I am older and better financially secured. The lesson is that fashion is not running away and would always remain part of humanity. Therefore, if you are out of it today you can easily catch up tomorrow.
Expensive Vacationing– It’s great to enjoy a vacation once in a while even as a fresh recruit. But they are not mandatory and there will always be a time when vacations are expedient and times when they are totally avoidable in exchange for saving. Now is the time to avoid it.