Congratulations on your first job! That first salary is exciting, but also the perfect time to build good money habits. Here's how to budget from day one.
The First Salary Mistake
Most people make the same mistake: they spend first, save what's left.
The result? Nothing's left. Lifestyle creeps up immediately. That higher income becomes the new baseline.
The solution? Flip it. Save first, spend what's left.
Before Your First Paycheck
- Open a separate savings account — Different from your salary account
- Download an expense tracker — Start from day one
- Know your take-home pay — After tax, not before
- List fixed expenses — Rent, utilities, phone, transport
The First Job Budget Framework
For India (₹30,000-50,000/month)
| Category | % of Take-Home | Example (₹40k) |
|---|---|---|
| Rent/PG | 25-30% | ₹10,000-12,000 |
| Food | 15-20% | ₹6,000-8,000 |
| Transport | 5-10% | ₹2,000-4,000 |
| Utilities/Phone | 5% | ₹2,000 |
| Savings | 20% | ₹8,000 |
| Fun/Misc | 15% | ₹6,000 |
For USA ($3,000-5,000/month)
| Category | % of Take-Home | Example ($4k) |
|---|---|---|
| Rent | 30% | $1,200 |
| Food | 10-15% | $400-600 |
| Transport | 10% | $400 |
| Utilities/Phone | 5% | $200 |
| Savings/401k | 20% | $800 |
| Fun/Misc | 15% | $600 |
Your First Financial Goals
Month 1-3: Emergency Fund Start
- Save ₹10,000 / $1,000
- Keep in separate savings account
- Don't touch it for normal expenses
Month 4-12: Build to 3 Months Expenses
- Calculate monthly expenses
- Multiply by 3
- Save until you reach that
Year 1+: Start Investing
- India: Start SIP in index funds
- USA: Max 401k match, then Roth IRA
- Even small amounts grow over time
Common First Job Money Mistakes
❌ Upgrading Everything Immediately
New job = new phone, new clothes, new apartment? No. Live like a student for the first year. Save the difference.
❌ Ignoring Retirement Savings
You're young, retirement is far. But compound interest works magic over decades. Start with even 5-10%.
❌ Taking on New Debt
Credit cards, car loans, EMIs. Avoid new debt in your first year. Build savings first.
❌ Not Tracking Expenses
You think you know where money goes. You don't. Track everything for at least 3 months.
The Power of Starting Early
If you save ₹5,000/month ($100) from age 22 at 10% returns:
- At 30: ₹7 lakhs ($14k)
- At 40: ₹30 lakhs ($60k)
- At 50: ₹95 lakhs ($190k)
- At 60: ₹2.8 crores ($560k)
Same savings starting at 32 gives you only ₹95 lakhs at 60. 10 years of delay costs you 3x the final amount.
First Job Expense Tracking
- Download Pocket Clear (free)
- Log every expense from day one
- Review weekly
- Adjust budget based on reality
The habit you build now will serve you for life.
Start Your Money Journey Right
Free expense tracker. Build good habits from day one.