Money Tips For Graduates
Life after college is the beginning of a new chapter. As young graduates, you are ready to embark on your post-college life. You’ve got big dreams and you want to achieve them.
While you have more money than you ever did when you receive your first paycheck, you also have plenty of new expenses. By taking your first step now, you can set your financial habits down the road. Here are four personal money tips for graduates.
A. Make a budget
A budget helps you decide what you must spend your money on. When you received your first paycheck, figure out what your take home pay will be. Make a list of your essential expenses such as rent, food, utilities, transportation groceries and clothing. Essential expenses are things you absolutely cannot do without. You will also have other expenses such as student loan, savings, insurance and entertainment.
Hold yourself accountable by analyzing how much you spent for the things that you need vs wants each month. There are things that you will likely sacrifice when budgeting. Think of the positives, passing up that branded clothes or handbags today means more financial stable will definitely makes you feel better.
Paychecks provide only the illusion of security. It is how you use your pay checks that determine your financial well-being. So, do revisit your budget every few months and make adjustment as needed as your expenses or income changes.
B. Live within your means
It is exciting to have money and go out and have your independence. But watch the spending and remember that it is important to live within your means. Living within your means requires you to be mindful of how you spend your money.
Find a way of spending that works for you. Do not try to keep up to your best friends or your neighbors’ lifestyle. Invite people over for a movie night instead of spending for movie ticket and eating out. Be honest with your friends if you can’t afford to dine at pricier restaurant, suggest alternatives that are affordable or host a potluck at your place. Another good way to save is by delaying your purchases, wait for sales.
Control debts before it controls you. Most people would advise graduates to use debit card or cash instead of credit card. This is simply because credit cards are proven to have cause overspending. Keep it simple by paying cash or use a debit card until you achieved self-discipline in spending.
At the end of the day, if your spending still outruns your income, you’ll have to cut your expenses or look for a higher paying or part time job to raise your income.
C. Plan to save
Since graduates don’t really earn much at the beginning of their career, the idea of savings might seem impossible. But everyone has to start somewhere. Even if you have only RM100 or even RM50 at the end of every month, start saving it.
Building the habit of saving is more important than the amount during the first year of your employment. Plan to save to achieve specific goals, for emergency and above all peace of mind.
Having specific savings goals make savings more meaningful. Maybe your goal is to save RM100 a month for a trip to the most beautiful island in Sabah or getting your parents birthday presents. By creating specific and attainable goals within a reasonable timeframe, you will be motivated knowing that you are getting closer to reaching the goal(s).
Savings is worth the effort. It gives you peace of mind. If you have enough savings for three to six months of your monthly salary, you’ll be joyful rather than stressed when you receive your college best friend’s wedding invitation from Singapore. The reduced stress of having a sizeable fund in the bank frees up your energy for more enjoyable thoughts and activities.
Once your savings account grows, it can be very tempting to spend the money impulsively. Before you make your purchases with your savings, consider the goals for the money. Just because you have the money, it doesn’t mean you can afford it. It all boils down to priorities. For example, you can either purchase the latest iPhone model or enroll yourself for one of the best self-development course.
D. Giving A personal financial plan is not complete until it includes giving. Give with a
cheerful heart as you are grateful for all that you have, to impact others, strengthen your community and it makes you feel healthier.
Take the first step by giving to your parents. For the last 20 years or more, you have seen the sacrifice and unconditional love your parents gave. Parents care and nurture you through the ups and downs, providing for your needs and giving the best that they could in order for you to thrive. You may not afford to give much but start with a small token. Whatever amount you can afford to give is good enough to show them your gratitude for the wonderful work they have accomplished in your life.
Another area of giving is giving back to community. Giving back does not limit to monetary contributions. As a young graduate with limited resources, don’t ever underestimate your ability to give. You can start by donating the little that you have. Besides monetary giving, you can volunteer to teach tuition at a non-governmental organization or be involved in charitable events. Everyone can find something suitable for them. Although your contribution may seem small, it all adds up to build a better community.
- To Hindus, giving is an important part of one’s dharma (religious duty).
- To Muslims, zakat (alms-giving) is one of the Five Pillars of Islam. It is the practice of charitable giving based on accumulated wealth.
- To Christians, one should give cheerfully and give according to the proportion to what God has given you.
- To Buddhists, giving without seeking anything in return leads to greater spiritual wealth.
Giving is contagious, once you put giving into your personal financial plans, you’ll see the benefits and it becomes a way of life. Giving is your ticket to changing your world and makes it a better place to live in.
“If you wait until you can do everything for everybody, instead of something for somebody, you’ll end up not doing nothing for nobody.” ~ Malcom Bane
To learn about how to grow your money, look out for our blog Why You Should Invest Today – Part I: The Inflation Effect.
Founder / Group Agency Manager
Group Agency Manager for GE Lifesavers, a AAA Agency an honour conferred upon an agency by the industry, and winner of the Million Dollar Agency award for four consecutive years, in recognition of annual sales totalling RM 1 million and above.
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