If you just graduated fresh out of college a few months ago, you should start looking forward to building a new chapter of your life. College life is full of fun, parties and spring break with your friends. All of these things will be missed because you now have different priorities in life. By this time, you should have already started planning for your future, and that includes securing your finances.
But did you know that a significant number of adults and young professionals from the age of twenty to thirty-five are having money issues? Worse, some of them are totally broke, leaving them with no other choice but to live with their parents. If you do not want to be in this position, you need to make smart decisions in life, and that includes how to manage your finances wisely. Here is a list of tips that can change your life forever.
Look for a job that will sustain you
Right after graduating from college, you should not waste any of your precious time wondering what to do with your life. The first thing that you should do is to apply for a job that offers a decent salary. Remember that you should start having an independent mindset about money, so the sooner you find a job, the better. Being a fresh graduate does not have to stop you from landing a good-paying job. There are many companies out there that offer a competitive salary and compensation even for fresh graduates. All you need to do is make a great resume and impress the interviewers with your credentials.
Start saving so you can pay for your own car
Having a car nowadays is not a luxury but rather a necessity. If your work requires you to travel long distances, you will need to invest in a reliable vehicle. You can choose from a wide range of brands and models from companies like Car Finance Giant. You can visit a website to check their affordable car loan offers for young professionals. Using public transport on a daily basis is time-consuming, plus it is more expensive than driving your own vehicle.
Start paying off your debts
If you were able to finish college without having to worry about student loans, you should consider yourself a lucky person. However, if you have incurred several debts while completing your degree, now is the time for you to start paying them off. You will be given a certain time to settle all of your student debts. But if you want to be free from debt a couple of years from now, you need to pay more than the minimum amount due each month as soon as you start earning money.
Be knowledgeable when it comes to your monthly cash flow
If you happen to have a fixed monthly income more or less, you already have an idea of how much you will be getting every 15 days or monthly, depending on the schedule of your salary. From there, you can calculate all of your monthly expenses such as food, rent, loans, and your daily living allowance.
For you to avoid experiencing issues with your budget, it is essential to living within your means. You can cut back on some expenses like food, travel, recreation, and shopping. Make a monthly and weekly budget and make sure to stick to it. Remember that if you lack financial discipline, you will end up incurring more debt in the future.
Make saving a monthly habit
Ideally, you should start saving at least ten percent of your monthly salary every month. However, if you are still single and you do not have many obligations to think about, you are expected to save more for your future. You should open two types of savings account. A specific portion of your salary should go to your retirement and emergency fund. You could talk to your payroll staff and make sure that they auto-debit your savings and transfer them to another account.
Start building a good credit score
Once you have a job, it is normal for banks to offer you multiple credit cards. You should use your cards to build a good credit standing that will be useful in the future, like when you are about to purchase your first home or car. Make sure to monitor your expenditure wisely and pay off your card bills in full, so you will not incur any interest charges or penalties that can affect your credit score. If you are a good payer, you get to enjoy certain perks like free travel tickets, discounted hotel accommodation, and other freebies in the long run.
Get yourself insurance
One way to secure yourself and your family is by applying for term insurance while you are still starting out in your career. In case something terrible happens to you (chronic sickness or death), you are sure that your dependents will be covered in the future. If you are worried about the premiums and the coverage, it would be best to discuss different options with your financial adviser. He can help you choose an insurance plan that is within your income, so you would still be able to pay for it for a certain period.
Lastly, it is essential to work hard and smart to achieve success in life. Remember that there are many ways to earn more money and increase your savings. If your schedule permits, you can start a side business or take a second job to help pay off your debts, insurance, and increase your savings. You can also diversify your income by investing a portion of it in the stock market or mutual funds, which can help you build your wealth in the long run. You could also attend various seminars to learn the ins and outs of trading stocks, which is something that you can do after office hours. Remember, aside from the things mentioned above, the most important thing to do to achieve financial freedom is to change your mindset about spending and debt.