It is a fact that working in a corporate job pays you more along with certain benefits, but despite of these reasons many people are inclined to work with small startup companies. The reason behind this is working with a startup company provides you a change to learn more and develop yourself in a better way. If you are employed with a startup venture, there are more chances that your role will be probably bigger than what it was mentioned in your initial job offer. This provides you a great opportunity to learn and enhance skills and talents beyond your role. Now, it is your responsibility to provide the required work to your company so that it can grow.
Working for a startup company can be fun as it provides you the opportunity to learn, but along with this it can also be terrifying as well. You have to work more, with respect to time and your role both. Beside this point money is the second important thing here, when working in a startup it is true that you will be getting less salary as compared to any MNC or corporate office. Job security is another big factor to be considered here. Startup ventures take a long time to settle and be a stable company and hence its employees are always at a big risk with their employment.
But the employees who really thrive in a startup setting don’t accept the job because of high salary and free snacks. They accept the jobs in startup as it’s a great way to kick-start their career and make a bigger impact on it. All these things are understood but apart from all these things there is an important thing which many of the startup employees forget about, and that is the management of their finances. It is a very important thing to be considered as for startup employees, the job always at a risk. Since startups are either unlisted or newly listed, their employees are generally ineligible for an unsecured loan owing to their low salaries and or the lack of data regarding company’s stability. Even if an employee is eligible for a loan, they will end up paying in the higher ranges of the interest rate offered. Here are top financial tips for the startup employees to help them manage their money better.
Financial Tips for Startup Employees
Start Saving in Emergency Fund Right Now
Having an emergency fund is always important and it is a fact that your job is at a risk as you are working with a startup company. Hence, it becomes more important for you to have an emergency fund. Your emergency fund should be that much with which you can survive for at least 4-5 months without any job. To contribute in your emergency fund you need to cut down on your regular expenses which you were doing earlier. Try to spend mostly on the requirements not on the luxuries. This this can help you save a lot for your emergency fund.
Balance Between Paying Debts and Saving Wisely
It is a common mistake which most of the employees make, many are not able to maintain a balance between paying debts and saving. Both paying your debts and savings are equally important. If you pay less on your debts, in long term you will be paying more as a result of interest imposed on your borrowings. On the other hand saving for your retirement and contributing to your PF account is also very important as on this your future life depends. It is always advised that pay off your high interest loans first and then clear your other debts but don’t forget to have some savings along with this.
Have Some Investment
Money can’t grow by simply keeping it in your pocket or bank account. If you want to increase the value of your money do some investment. When you invest your money it becomes an asset, and gives you more money in return when kept for some time. Real-estate, stock market and mutual funds are now a days best options for investment. But always keep in mind that your investment should be after saving enough for your emergency funds. Your investments are the asset which can help you in your worse.
Equity and Employee Stock Options
Startup companies generally give value in the company to their employees in form of equity — it’s an approach to give compensation without spending more money, it is also a form of incentive to the employees. At the point when the organization (company) does well and hits the objectives, it increases the company’s value as a result the value of companies share increases and the value of employee’s share also increases. The decision to opt in or out of ESOP should be based on the decision after having compared and analyzed the monthly budget and the compensation being offered.
Hence it is very important to understanding the workings of employee’s investment options and its importance in the personal finance of the employee. Financially, it can be a tough life being employed with a new startup venture, doesn’t matter the career opportunities involved. This makes life even more uncertain and hence startup employees need to be more careful about their money management. The above mentioned points will not only help in managing the money well, but will also help the money grow with time.