When you are just starting your career, getting that first decent-paying job as a young executive feels like a dream made possible by all those years studying for exams for that degree or professional qualification.
However, everywhere you look you can see young executives at good companies are perpetually complaining about how their paychecks barely cover their expenses and how they have no money. This is due to two reasons: one, their salary is actually below industry standards in which case they should aim to upskill and move on to better opportunities or two, these young executives with degrees and qualifications from globally-reputed education institutions (that offer them little to no personal financial advice) are engaging in poor financial habits.
If you are an up and coming young executive, here is some financial advice that will help you gain full control of your finances.
1.Keep track of expenses, and then reduce them!
Maintaining a record of all your expenses, even the most minor ones, does not make you a tight-fisted Scrooge. Rather, it will help you identify your biggest financial leaks and really enable you to save money. You might find that your “occasional” self-treat at that fancy coffee shop happens far more frequently than you thought. Make a budget for your expenses, first and foremost allocating a percentage for your savings account after which separate your expenses into fixed expenses (like bills, monthly subscriptions, food etc.) and others (like shopping sprees, night outs, mini-vacations etc.). Another handy financial advice tip is to take a deeper look at your bills; check what those monthly bank charges are, look at how your mobile bills are adding up and even a cursory glance at the supermarket bill might save money for you in the long-run. A few applications that would help you track your expenses - https://www.businessnewsdaily.com/6233-expense-tracking-apps-smartphone.html
2. Diversify your income streams
Depending entirely on your monthly paycheck to cover all your expenses is ill-advisable these days. Increase the amount of money you make by diversifying your income streams, either through freelance/part-time work, good returns on investment or through passive income streams (like property/vehicle rental income, high-interest fixed deposit accounts, ads on your blog or YouTube channel). If you are unwilling to sacrifice your lifestyle or miss out on opportunities in your youth in order to save money, increasing your income is the perfect solution.
3. Control your debts
Unfortunately the reality is that no matter how large your salary is, it will never actually be enough to support the kind of lifestyle young executives aspire towards. Debt is unavoidable, and taking out an occasional payday loan never hurts. However, take great care not to fall into unnecessary debt or vicious debt cycles. Never ever sign as guarantor for loans or leases for your friends or even family, especially if they have a poor credit history. If you ever lend or loan money to a friend, co-worker or family member, only lend/loan an amount that you are comfortable with losing. As the saying goes, “when you lend money to a friend, be prepared to either lose the money or lose the friend”. If you are already in a bad debt situation, it is advisable for you to pay off your high interest loans first.
It is crucial to adopt good financial habits and save money from the moment you become a young executive. These are the habits that will follow you all the way up your career ladder and propel you towards complete financial independence. Keep up with the latest financial advice by staying tuned to OnCredit.