Congratulations on becoming a citizen of the world (and jumping headfast into personal finance for adulthood)! After countless nights of hitting the books and the library becoming your second home, you have finally graduated from the journey of formal education. We don’t mean to burst your bubble but here is where the journey of adulting begins! Part of this journey comes with the responsibility of being financially “woke”. Here are some personal finance tips to help you stay in control of your finances:
Don’t let your student loans compound
Though many of us fresh graduates are in the red – we don’t have to let student loan debts define us. It may feel like a rude awakening to go from paying nothing to paying several hundred or thousand dollars a month once the grace period is up. However, the trick is to find the optimum amount to set aside each month without compromising on your basic needs and channel that into your student loan repayment plan. There are tools in place to help you find that sweet spot. For example, a student loan calculator to help estimate monthly repayments. With the right plan of action, you will become debt free in no time.
Start a budget
The idea of budgeting may seem scary and daunting, and to some – even pointless. After all, who has the time as an associate in a new job to sit down and plan out their personal finances after a long day of work. However, budgeting is an important tool in personal financing, it allows you to track your expenses and cut back on frivolous spending.
Track your expenses
This may sound like a no brainer but it is of paramount importance to track your expenses! Regularly take a look at where you are spending and make cuts on unnecessary purchases. A little goes a long way – many small and minute purchases can add up to a lot in the long run and these could be saved for other life goals such as the down payment of your first flat! There are various apps to help with tracking your expenses or you could do it the old fashioned way on an excel spreadsheet!
There’s never been a right time to start investing. The sooner you start investing, the more time you have for your money to build interest. There are many investment options in the market – you can even start small with just $20! Ultimately, you should do your due diligence and invest within your risk tolerance.
Read also: 9 Principles of Investing for Beginners
Find cheaper ways to socialise
As a newly minted young adult, juggling time between work, family and friends are important. Or sometimes you just want to let loose and have some fun! However, socialising and having fun does not always have to be at a bar or somewhere with a heavy price tag. Instead of meeting over drinks or dinner at restaurants, you could do a nice home cooked meal with your friends and socialise over some board games at home. Ultimately, it is the quality of time spent together, regardless of the activity.
It is never too early to start planning your personal finances. As fresh graduates embarking on your career journey, it could be wise to start planning ahead and setting life goals. By being financially disciplined, your future self might even thank you for starting early!
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