Finances and computers have always gone together. In this article, I will be talking about how people belonging to the tech industry have an edge in handling their finances.

The simplest example of this is that some of the world’s richest people – Bill Gates, Mark Zuckerberg, Jeff Bezos belong to the tech field!

The truth is that the tech profession gives one the power to earn really well very early in life. This is due to the fact that technical knowledge is backed more by knowledge and skills than by degrees. This enables one to start working very early in life.

Having significant earnings at an early age gives techies greater advantages in their financial future.

Here, I will discuss some simple yet effective tips on how to manage your personal finances better:

Tip #1: Money can buy ‘choices’

Money is not about wanting to buy a diamond. Money is about having the choice to decide between diamond and platinum.

Money is about having the ability to afford choices. These choices can then give you the freedom to spend money on what is important to you.

Once you earn stable money, you must learn to prioritize what to spend it on. You must learn to respect and value the choices that come with earning money.

Tip #2: The initial money you’ll earn will be your greatest wealth

Investing your money is the wisest decision. The catch here is that the earlier you begin investing, the more time your money spends in the market, the more return it will get for you.

And guess what, techies? You people have the advantage of earning early and investing early.

Let your money spend some good time in the market and enjoy the returns.

But wait, in no way am I asking you to put all your money into investments. Start by putting in a little part of your savings in investments like stocks, mutual funds etc.

The basic point I am trying to bring forth is that time helps to amplify money.

How?

Through a magical concept called compound interest!

In layman terms, compound interest is a method by which your investment interest is calculated on the basis of your accumulated amount i.e. principal amount plus interest earned till now.

Also, if you believe that you’re no longer ‘young’ anymore and you have lost the chance to invest ‘early’, let me tell you that it doesn’t matter.

The point is to start as soon as possible. The sooner, the better.

Tip #3: Invest in your own Financial Education

Very few schools offer basic financial education. Instead they choose to teach us about circles and triangles.

The consequence? Most of the people fresh out of college don’t even know how to apply for a credit card, what their tax rate is or how much interest they can potentially earn by investing.

These are some essential and basic things that everyone must know.

Consider learning this financial knowledge as no less than an investment.

Also, if you do not wish to pay a hefty fee to learn financial terminologies, no worries. You can do it online for free!

After all, no one knows how to make the best use of online resources better than tech geeks!

If you don’t know where to start, start by understanding your country’s tax system.

Tax is a very complicated concept to understand.

In other words, tax is taxing!

However complicated it is, every individual will have to deal with it at one point in their lives or another.

Hence, it is advantageous to learn it as soon as possible.

Also, there are multiple legal ways in which you can manage to pay lesser tax. By increasing your financial literacy level, you’ll be able to pay lesser tax (legally).

Tip #4: Learn to distinguish between good debt and bad debt

While you may be thinking that all debts are bad debts, it’s not true.

An example of bad debt can be the credit card debt that all of us accumulate. We often do it to buy something lavishly expensive (and unnecessary) without realizing that it carries a significant rate of interest.

Also, remember that compound interest works on debt as well. The more time you take to repay, the more you end up paying.

Good debt, on the other hand, is like an investment. Whenever one purchases a property, it’s done using a loan, not because one does not have the ability to pay the full amount, but because one does not want to block all liquid cash into an investment venture.

This property then later tends to generate rent which is mostly enough to cover the loan installments. After the loan has been paid in full, the property owner enjoys the whole rent amount.

But, this isn’t to say that good debt is always a smart, or rather a good idea. If you fail to evaluate a debt, even a seemingly ‘good’ debt can give you great losses.

As technical folks, you people are more analytical in nature when compared to others. Hence you must make good use of your skills to identify a bad debt.

The best way for you to keep a check on your financial performance is to make use of…spreadsheets!

Put everything related to your finances into a spreadsheet and then analyze every nook and corner of it.

Tip #5: Diversify your Income and reduce risk

Having a single source of income is risky.

Imagine you a website developer for X company and that company shuts down. Well, that will be a life-changing event.

It won’t be if you had multiple sources of income in the first place.

Freelance website development, ethical hacking, coding are just some side jobs you can do along with your main hustle.

This way, you will be able to reduce your risk and increase your income.

Win-win!

Keep learning new skills which are demanded in the market. This way, you will secure your work line from going obsolete.

Work extra in your free time, on holidays, on weekends. Do freelancing work for as many people as you can. This additional cash that you will earn can fruitfully be invested.

Trust me; all those working weekends will pay off in the end.

Invest in diversifying your income streams. This will reduce your risk and give you extra cash.

Tip #6: Work harder to get luckier

Rich people own both talent and luck.

How?

Well, people who make it big in life tend to be lucky at some point or the other. For instance, Bill Gates was lucky enough to have been introduced to computers at an early age.

But being lucky is not enough.

You must be smart and attentive enough to utilize these ‘lucky chances’ you get.

It is often said that the harder you work, the luckier you’ll get. Meaning that the harder you work, the more opportunities will knock on your door.

Tip #7: Time is money

Utilizing time should be a priority.

For those of you who are big-time video game players, it’s time you analyze how you spend your time.

Time is money. It’s good to take some time off for recreation but you should be able to plan and prioritize your time.

When you’ll make your career and finances your priority, you’ll experience a change within yourself. You’ll want to skip unproductive activities and instead opt for those which will help you in some financial way.

To get motivation to plan your time, you must have some goals.

Tip #8: Have a goal

On the off chance that you don’t have a dream of where you’re going, or you don’t have an objective, you just float around and never really end up anywhere.

An objective keeps you centered. An objective drives you to put time in moving in the direction of something concrete

Objectives can be extremely personal or impersonal; they can range from saving for your kids’ future to retiring early.

Conclusion

I hope this article was helpful to you techies!

Just follow these simple tips and you will be able to handle your finances in an appropriate manner.

Before taking your leave, let me summarize these tips for you:

• Tip #1: Money can buy ‘choices’
• Tip #2: The initial money you’ll earn will be your greatest wealth
• Tip #3: Invest in your own Financial Education
• Tip #4: Learn to distinguish between good debt and bad debt
• Tip #5: Diversify your Income and reduce risk
• Tip #6: Work harder to get luckier
• Tip #7: Time is money
• Tip #8: Have a goal such as calculating your net worth and increasing it year-on-year

Take care!

Ciao!

Author’s Bio:

Dishika is a personal finance blogger at Bachat. With her articles, she breaks down complex financial concepts into bite-sized articles that are fun to read and easy to understand. Bachat is a one-of-its-kind mobile app that helps you save money on autopilot.

Looking forward to talking to you soon.