BY zacks elvis
The graduation period is all exciting and celebratory. You get congratulations, you party and have fun. Once it subsides, your real world life begins. You get into the job market and start working. You get a taste of professional life. The best part: you start earning. At this point you may be tempted to buy a house, a car, spend irrationally on your wardrobe, start using your credit cards, neglect insurance coverage, and so on. You are looking forward to an exciting, new lifestyle. These are huge mistakes and need to be avoided at any cost. You need to take care of your finances right away in order to be financially successful later on in life when it matters more.
Plan your budget. You should start with planning out a budget and keeping it updated. You can list down all your regular and necessary expenses such as bills, housing costs, travelling costs and so on. You will get an idea of the proportion of your income that goes into the necessary, unavoidable costs and how much you can afford to spend on other things and to save.
Do not delay saving. You may feel that because your job is not paying you well enough it is okay to not save. That is not the way things work. Try to set out a certain percentage (around 10% would be ideal) of your income and stash it away. Make a savings account and directly have part of income transferred there. Once it has become inaccessible to you, you will not feel that you need that amount and that you cannot do without it. If this percentage is not suitable you can always reduce it, or just save a particular amount each week. The important thing is to save somehow. It will allow you to have an emergency savings account which is a good thing.
Do not buy a car and/or house yet. Everyone wants to own their own car and house. They are like must-have items and it is, of course, good to own one. However, it is not a good deal if you have had to buy it mostly with debt. While borrowing money for car or house is not a problem on its own, it becomes more of a burden when you are already in debt. More often than not, a recent graduate is already buried under student loans andnot qualified to go for a house and car. They should not borrow more to fund their cars and houses. It is just not rational because you already have to give a part of your income to repayments of student loans. Add to that your car and/or house loans as well and it will be a huge load that may become impossible for you to manage unless your job is really, really well-paying.
Pay off your debts. It is important that you try to get done with whatever debts you have as early as possible; house, car, student debts. Make sure to have your financial situation reviewed so that the monthly repayments you are entitled to make suit you. You can also opt for extra payments; even one or two extra per year would be helpful.Similarly, there are other such options available as well. You just have to look around and select the suitable one. The earlier you pay off your debts, the less you will have to pay in the form of interests and you will end up saving a big amount over the years.
A recent graduate, starting out fresh in life, can opt for sensible savings or end up as a debtor. His habits and money decisions will decide his situation. No one wants to be burdened with loans. You have to repay them sooner or later anyway so keeping on borrowing and spending money on things you do not need is a bad idea. It is better to save up and pay off everything you owe before starting to live your life in the style you want.
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