Startup tech companies, tend to attract young, talented professionals and why wouldn’t they, the pay is quite high even for freshers. This leaves IT professionals with a lot of disposable income. Before we talk about finance tips and how IT professionals can use their income wisely, let’s understand why financial planning for them is different.
Why is it different?
Techies have their own set of challenges when it comes to financial planning. Why? They rely intensely on stock-based compensations, high-earnings and career volatility that is prevalent in the industry.
This calls for professional financial advice to keep taxes down, a specialist monitoring the pulse of your company’s financial status and how it will or will not personal financial health. You will need expert advice to make the most of your income and benefits, while also avoiding a shortfall at retirement. But start with baby steps. Something you can do on your own.
Savings mode on
Don’t follow the spending budget plan because savings is what remains after spending. Make the switch to a savings budget plan where you first budget, save and then spend what is left.
But what can you save for? Start with identifying goals and figure out how much money will be required to fulfill those goals. Here are some financial tips for IT professionals that will help them with their savings goals.
For the future
Plan for the commitments and responsibilities that are coming your way. For instance, your marriage, providing for your parents or saving up for a down payment for a future house and car. Most importantly, your retirement funds.
With IT change is the only constant. It’s important to constantly keep upgrading your skills over time. Save up enough to enroll for short-term courses in an upcoming technology or even to learn that new programing language that is most likely to take over an existing one. Get certifications to enhance your employability.
A rainy day fund
Job uncertainty is a major concern in IT. The demand for skilled professionals in the sector ensures that no worker remains unemployed for a long time. This is where having a rainy-day fund or contingency will give you peace of mind. It will enable you to focus on the job search without having to be broke. Ensure to make a detailed cash flow statement, list down your monthly expenses and multiply that by six. Contribute towards this fund gradually by investing in a liquid fund.