Congratulations! You made it! You studied well, worked hard and now it is time to embark onto the next leg of your journey.
At this stage, you are probably thinking of finding employment. I am sure you will choose well and find a job you will enjoy.
Upon landing your first job, you will be faced with the excellent challenge of managing your money.
You will have a sense of financial independence when you receive your first pay cheque, but remember with that sense of financial independence comes the responsibility of being an excellent steward.
Seeing that you are new to this level of responsibility, we created ten tips for your financial journey:
- Define your short term and long term goals. Before you set up a budget, you should take some time to think about where you want to be financially. e.g. you may want to pay off your debts, build a home, start a business or purchase a car. Having these goals in mind will enable you to create a spending plan unique to your financial aspirations and life plan.
- Set up a budget. A budget is a spending plan used to allocate money for various purposes. Having this tool in place will enable you to live within your means and also prevent you from overspending.
- Pay off your student loan as soon as possible. Having the weight of debt off your shoulders will give you peace of mind. The sooner you pay it off, the sooner you will be able to attain other financial goals.
- Set up an emergency and unemployment fund. Life tends to catch you by surprise. The things we don’t plan for do happen and it is always important to save money for a rainy day. Having these funds in place will help ease the pressure if an emergency or unemployment comes your way.
- Avoid unnecessary debt at all costs. You do not necessarily need a loan to purchase a laptop. Simply set aside some money and purchase it with cash.
- Make it a habit to use a debit card. Credit cards have very high interest rates. If you make a purchase of $50, you will end up repaying $50 plus interest when the bill is due. With a debit card you will only pay $50 for the purchase you made.
- Ensure your investment portfolio is balanced. Do not chase after highly volatile investments with the aim of becoming rich quickly. You will run a higher risk of losing money.
- Plan for retirement early. Invest in a registered retirement savings plan. Remember, you can claim the amount you pay into your RRSP when it is time to file your taxes.
- Know when to say no to sales personnel from financial institutions. Insurance salesmen and credit card personnel will be seeking you out, because they know you have just finished your studies. No need to be alarmed or worried, they are just doing their job. However, do not feel pressured to say yes to every person who approaches you. Do your research and make informed decisions.
- Plan for your vacation strategically. Predetermine your total costs and set aside money on a monthly or quarterly basis. When that time comes around to book your ticket and travel, money will be readily available.
Sowing seeds of these sound practices will indeed bear fruit and in time harvest wonderful results.
Here’s wishing you optimum financial health, success and prosperity in your future endeavours!