New Job, City, New Costs: A Survival Guide For First-Job Finances

Moving to a new city for your first job is exciting but also requires careful financial planning. You need to adjust to new realities, requirements, additions, and deletions in your budget. Also, this is the time when you lay the foundation of your financial life.

Here are the key steps and things to keep in mind financially.

Budgeting And City Related Expenses

“The budget needs a bit of your time. You have to include your new income with the changed expenses due to your movement. Few expected fixed expenses would rise. This includes rent, utilities, transportation, and variable expenses like food, entertainment, shopping, etc,” says Madhupam Krishna, Securities and Exchange Board of India (Sebi) registered investment advisor (RIA) and chief planner, WealthWisher Financial Planner and Advisors.

Be ready for city-specific costs. If you are moving from Dehradun to Chennai you would need to put in more air conditioners. The cost of living can vary widely between cities, so factor in rent, transportation, and groceries at the new location. If in Mumbai or Bangalore, your rent will be high.

Setting Up Bank Accounts & Financial Transactions

Ensure your employer opens or credits your salary to your preferred account or new account as per their policy. You need to move your other accounts, too, for better accuracy. Most things can be done online, but you may still need to get your bank account transferred.

Link your new salary account to your EMI account, and your account through which you invest regularly. If your permanent address has changed, update your PAN, bank, Aadhar, and other financial documents to reflect the new address.

Cost Of Moving

When moving to a new city for your first job, be ready for various expenses. Security deposits and advance rent vary, so plan for a significant upfront cost. You'll also need to pay deposits for utilities like internet, gas, and electricity.

Ensure your rent agreement clearly outlines rent, maintenance, and due dates. If moving a household, you'll likely need to hire packers and movers—you may be reimbursed but often need to pay upfront.

Lastly, consider public transport costs or, if you own a vehicle, budget for fuel, insurance, and parking. Careful planning can help manage these expenses effectively.

Insurance

If your employer offers health insurance, review the coverage. “Consider taking additional coverage if needed, especially if you have dependents,” says Krishna.

Protect your belongings in case of theft, fire, or natural disasters through renter’s insurance. This is especially important if you’re renting an apartment. Also, make sure your vehicle insurance is updated to reflect your new location.

Retirement Planning

Ensure your employer is contributing to your Employee Provident Fund (EPF), which is mandatory in India. If not, you might want to voluntarily contribute to schemes like the National Pension Scheme (NPS). Set up these as soon as possible. Consider setting aside a portion of your salary towards long-term investments like mutual funds or stocks. The earlier you start, the better.

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Tax Matters

Be aware of tax deductions like Section 80C (investments) and 80D (medical insurance premiums). If you plan to file via the new tax regime, be clear of requirements and inform payrolls about the same.

“Setting yourself up in a new city will lead to exhausting your emergency corpus. You should aim to have at least three-six months' worth of living expenses saved. So, refill it or plan to refill in steps as this is your cushion against unexpected situations like job loss or medical emergencies,” says Krishna.

A change in location does not mean you can skip EMIs or dues. Most are automatically paid via banks, UPI, etc. Hence keep track of these. Do not skip them as it may lead to a loss in your credit score and future credit eligibility.

Networking

This is last but very important. A new city means a new beginning and it becomes easy when you have friends around you. Join local communities or networking groups related to your profession. Join groups around your hobby like cycling groups, and track lovers. Networking can also open up opportunities for freelance work, side jobs, or better job offers.

Moving to a new city for your first job is exciting but needs careful financial planning. Adjust your budget, set up bank accounts, and plan for moving expenses, insurance, and retirement savings. Maintain an emergency fund and build a local network for support.