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Fin24 user and budding chartered financial analyst Tinashe Guramatunhu writes about the trials and tribulations of handling his first-ever salary cheque:
I am a CFA candidate and this is my story about entering the working world, the financial ups and downs and the lessons learnt. In the first part, I wrote about how I landed my first job.
What did I spend my money on?
As a newbie to the working world, one often starts with little to no assets, calling upon the help of family and friends for financial support.
I wasn’t one of the lucky newbies who didn’t have to go through this, but was a direct beneficiary of the support in every sense of the word. For that I’m thankful for the friends and family around me (that’s one of the reasons why it’s important to surround yourself with the right company).
I figured that the best way to relate and give advice would be through my experiences and the lessons learnt.
Seeing that my first pay cheque was R3 000, there wasn’t much I could buy or do with my money although I’d never had that much money in my bank account before.
I look back at those days with fond memories of buying a pair of work shoes that had no idea what they were getting into. If shoes could talk! Not only did I buy shoes, but a whole lot more.
Mistake number 1
It’s not entirely wrong to celebrate and acknowledge your achievements, be it financial or otherwise, especially after having worked hard for it. The first thing that came to my mind after getting my pay cheque was to celebrate; I mean it’s only the natural thing to do, right?
I quickly learnt that when you receive some cash (especially when it’s not in abundance), it would be best to think of your priorities and cater for those before buying a beer or a bottle of wine. In my case I had to budget for the coming months and find a place to stay closer to work.
I was taking two taxis to get to work, so transport alone was setting me back R40 a day, translating to R800 for the month - an expense I should have prioritised.
Couch and fridge in, money out
With my salary having jumped up a couple of levels, life was good; I could afford a beer or two and finally pay rent. I was fortunate to find a place close to work, so close that I could walk to work. While many of you might be familiar with paying rent, I had never done so before, especially out of my own pocket.
Never underestimate the chunk rent can take of your income. As a rule of thumb, most people will tell you to spend close to 30% of your income on rent; my opinion is that your rent should be based on what you can afford and your current circumstances, although I wouldn’t throw away the 30% theorem.
Part of getting a new place is furnishing it and furniture doesn't come cheap. As the couches, fridge and the washing machine came in, the money went out. This is often the time when most young people begin to take on debt: clothing accounts, furniture accounts and the infamous credit card.
Some may praise credit institutions and some may loathe them, but they do come in handy at times (provided their facilities aren’t abused because they’ll end up abusing you!).
Lessons learnt: Learn to prioritise and budget for the future, live a little, but don’t forget to pay rent.
Credit card shenanigans coming up.
I am a CFA candidate and this is my story about entering the working world, the financial ups and downs and the lessons learnt. In the first part, I wrote about how I landed my first job.
What did I spend my money on?
As a newbie to the working world, one often starts with little to no assets, calling upon the help of family and friends for financial support.
I wasn’t one of the lucky newbies who didn’t have to go through this, but was a direct beneficiary of the support in every sense of the word. For that I’m thankful for the friends and family around me (that’s one of the reasons why it’s important to surround yourself with the right company).
I figured that the best way to relate and give advice would be through my experiences and the lessons learnt.
Seeing that my first pay cheque was R3 000, there wasn’t much I could buy or do with my money although I’d never had that much money in my bank account before.
I look back at those days with fond memories of buying a pair of work shoes that had no idea what they were getting into. If shoes could talk! Not only did I buy shoes, but a whole lot more.
Mistake number 1
It’s not entirely wrong to celebrate and acknowledge your achievements, be it financial or otherwise, especially after having worked hard for it. The first thing that came to my mind after getting my pay cheque was to celebrate; I mean it’s only the natural thing to do, right?
I quickly learnt that when you receive some cash (especially when it’s not in abundance), it would be best to think of your priorities and cater for those before buying a beer or a bottle of wine. In my case I had to budget for the coming months and find a place to stay closer to work.
I was taking two taxis to get to work, so transport alone was setting me back R40 a day, translating to R800 for the month - an expense I should have prioritised.
Couch and fridge in, money out
With my salary having jumped up a couple of levels, life was good; I could afford a beer or two and finally pay rent. I was fortunate to find a place close to work, so close that I could walk to work. While many of you might be familiar with paying rent, I had never done so before, especially out of my own pocket.
Never underestimate the chunk rent can take of your income. As a rule of thumb, most people will tell you to spend close to 30% of your income on rent; my opinion is that your rent should be based on what you can afford and your current circumstances, although I wouldn’t throw away the 30% theorem.
Part of getting a new place is furnishing it and furniture doesn't come cheap. As the couches, fridge and the washing machine came in, the money went out. This is often the time when most young people begin to take on debt: clothing accounts, furniture accounts and the infamous credit card.
Some may praise credit institutions and some may loathe them, but they do come in handy at times (provided their facilities aren’t abused because they’ll end up abusing you!).
Lessons learnt: Learn to prioritise and budget for the future, live a little, but don’t forget to pay rent.
Credit card shenanigans coming up.
- Fin24
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