Let’s be real. Finance budgeting when you’re a fresh university graduate is not anyone’s strong suit. Stepping into the real world often entails instant noodles and being perpetually broke. Of course, this isn’t to say that young adults can’t learn how to spend wisely.
Before making any plans, it’s most important to figure out your money goals. Where do you want your money to go? What is valuable to you? In university, money probably meant restocking your dorm with essentials and having enough for a night out. With independence comes a change in priorities. There are a lot of things to consider that are no longer your parents’ responsibility.
While outlining a budget may seem simple enough, there is always room to educate yourself. Resources on personal financing are available on pretty much any platform — whether as a YouTube video, article, or book. Collate as many tips as you can and see what money-saving methods can potentially work best for you.
At this point, you’re a step closer to actual budgeting, but not before setting short and long-term objectives. Think about what you are saving for in the next few months to the next few years. In terms of immediate goals, are you looking to purchase a car or perhaps fund an apartment? In the long run, do you picture yourself having children? The future can be unpredictable, but knowing what you want, even a decade early, is a good source of motivation.
Now for a long-awaited moment — making a budget. Understand your cash inflow and outflow. Know where your money needs to go and how much. Online tools can help paint a clearer picture on how much to set aside for rent, transportation, food, leisure, health, and everything else. Be specific, as you are basing this on a monthly income.
Insure what you can. As a fresh graduate, insurance may seem frivolous, or something you simply can’t afford at the moment. But when hospital bills start rolling in, you’ll thank yourself for being insured. If your job doesn’t offer such benefits, consider self-insuring. Either way, seriously consider plans with good coverage.
Because adults have them, you’ll probably also want to apply for a credit card. Doing so will allow banks to grant you credit scores (if you’re a smart spender) and, in turn, make you eligible for loans. In order to keep up appearances, you’ll want to always pay your bills on time and avoid being indebted whenever possible.
On the occasion you have extra money to spend, treating yourself is tempting. By all means, you should do so — but within your financial capacity. Remember to always prioritize. Spend in cash because it is easier to remain disciplined. You can’t see what you are spending on a credit card. Limit yourself and ask: do I really need this? If you can live without something, don’t purchase it.
Money is not always fun, especially when you are lacking it. But being smart about it makes everything a lot easier. Bidding a sheltered college life goodbye may seem incredibly daunting, but experiencing a smooth transition into the working world is always possible. Generally, hard work and research always pays off.