Must know budgeting tips for new college graduates

Being a new graduate offers so many possibilities for a better and brighter future.

You’re in a position to visualise your future and start working towards making all your dreams come true.

It’s an empowering feeling to know that you can finally take control of your life.

But it can go wrong if you do not have a financial plan that’s fully feasible.

Let’s be real; not all graduate students are well-equipped with financial literacy.

While some students may have learned financial lessons at home, some haven’t.

And, even if you’re one of the lucky college graduates, you will find that your “new” reality is far different from what you had imagined.

You will learn about the prices of things you previously didn’t need to pay attention to, like health insurance, for example.

So, it’s important to have a plan for handling your personal finances.

You first need to know when and where you should be spending money as well as knowing how to save money.

In this article, you will find money-saving tips and budgeting tips for graduates to help you plan your short-term and long-term financial goals.

Draw up a budget

Your budget is dependent on how much money you earn and your responsibilities.

The purpose of drawing up a budget is to help you organise your money, knowing exactly where it is going.

It helps you to take control of your spending.

After your second month in your first job, you’ll have an idea of what your financial responsibilities, needs and wants are.

You’ll also know exactly how much you earn after tax and deductions; that is your net pay.

This means that you’ll know how much money’s available to spend without going into debt.

In your budget, list all of your responsibilities or needs such as student loan debt, transportation or petrol money, rent, food, utilities, etc.

List the amount you spend on each item and tally it up.

Also list your wants, such as new work clothes, a new phone, or any other essential items.

From here, you will learn how much extra money you have left each month after paying off or buying your needs.

This will help you decide on how much money you can spend on some of your wants, and how much to put towards savings and investments.

In South Africa, there is a list of digital budgeting tools and apps that you can use to track and manage your spending.

Prioritise your student loans

Remember that your student loans got you to where you are today, so try and pay it forward by paying your student loan off on time.

That way, another student will also gain an opportunity and be granted a student loan.

More importantly, you don’t want to start your financial journey by avoiding the payment of a debt that will always be at the back of your mind.

It might be difficult to play catch up later when you have more responsibilities added to your plate.

If your budget clearly shows that you have the ability to pay off your loan, make it your goal to get ahead of it and try to get it out of the way as soon as possible.

Seek financial assistance

Seeking assistance where needed is not a bad thing; not everything is possible immediately.

You will need a couple of months, even years to afford some of your needs.

However, you don’t have to wait for long to get yourself something you need.

For example, you might need a car that’s going to boost your confidence and add convenience to your life.

Getting from point A to point B will be essential in helping you navigate your new working life.

Whether you already have your eyes locked on a ride or you’re still thinking about it, start putting the goal in motion and apply for graduate finance.

You’ll know which car you can afford, and you’ll soon be able to arrive at work on time and enjoy the team-building experiences.

Perhaps, you’ll even get a chance to chat with the boss and explain how you can become an asset to the company.

You can easily calculate loan repayments to make it easy for you to know how much you’ll need to pay towards this finance.

Steer clear of credit cards

Yes, we’re telling you to get a car, but not a credit card.

A car is a valuable asset, but credit isn’t, at least not at this stage.

The idea of a credit card may sound tempting for you, not because having a credit card is cool; it helps build-up your credit score.

Anyone with a job relatively wants to have a healthy credit rating.

But as a new graduate, it is advised that you get the feel of handling money first before taking on unnecessary debt.

You don’t want to increase your monthly financial obligations with credit card payments that you can do without.

Stick to the budget you have created, and you will find that a credit card is not yet a necessity for you.

Medical aid is important

Being young is not a repellent to sickness, illnesses or diseases.

You want to get yourself medical aid because it will be essential for when you get sick, unexpectedly.

Without medical aid, it would be difficult to budget for a doctor’s visit that you won’t see coming.

You’re more likely to find a medical aid with low premiums if you’re the main holder who has no other beneficiaries.

Your health is important, and you should treat it as such.

Open up savings and investment accounts

When people think of savings, they often visualise a huge amount of money.

Savings do not have to be in thousands from the get-go.

You can start small and build up your savings over time, and as you get salary increases.

There are several ways to save money; it all depends on what your bank offers.

But there are short-term and long-term savings and investment plans.

They can start from three months all the way to 12 months.

Make a choice that’s suitable for your needs and lifestyle.

Reward yourself

Granted, being a new graduate comes with its own set of responsibilities that might cut you short on the financial front.

But it doesn’t mean you cannot reward yourself every once in a while to thank yourself for all the work you’ve been putting in.

Whatever the reward will be, add it to your budget, that way you’re still in control of your spending.

Gear up for financial success

As a new graduate, you have a rare opportunity to start from a blank canvas.

The key to achieving financial success is proper planning.

Once you get that right and stick to it, you’re going to make financial decisions that you will thank yourself for in the long run.