Being a recent graduate can have you feeling slightly anxious about all the financial responsibilities you are about to take on. You may be wondering what kind of financial obligation you should commit to first, whether it is finding a place to live or buying a car. In this article, we will take a look at how you can better prepare yourself for the more serious money decisions, how to build a credit record, how to purchase a car or any large asset with ease, and ways you can ensure that you gain financial freedom at all times.
Start With The Basics
When it comes to learning how to be financially stable after college, university or any kind of schooling, you need to first understand the basics. If you are lucky enough to secure a job after varsity, you will need to learn a few budgeting tips in order to survive adulthood and gain financial freedom. Here’s how to start:
- Bank with your apps: use your bank’s app to transact for your needs and wants. This will prevent you from having to make endless visits to the ATM to draw cash and incur bank charges. Set up debit orders for important payments like rent and avoid having to be surprised every time you have to pay up.
- Get into budgeting: the habit of budgeting not only teaches you how to manage your money but also helps you retain some money. So, always draw up your income versus expenses and make a detailed list or spreadsheet where you will record where all your money goes.
- Invest: this can be done by setting up an investment fund or buying shares. With investing, you are looking at saving up money that you will need in the far and further future.
Managing Your Money
While budgeting and investing are some of the best ways to help you manage your funds better, how you spend also impacts that. So, avoid impulsive spending and always set money aside for ‘rainy days’. This could be when you or a loved one gets sick and needs medical attention if you do not have medical aid, it can be to fix something broken in the house, or to pay for that school trip for the kids that slipped your mind. Spending wisely is another money management tip that helps you on the path to financial freedom.
Here are a few tips on how to manage your money:
- Resist the urge to spend: always remember that even though you don’t need cash flow to buy on credit, you’ll need cash flow to pay off the credit later on. Alternatively, just because you have the cash flow for a purchase doesn’t mean you can afford to go through with it.
- Plan for your financial future: the onus here is on you. Don’t let others’ opinions and advice derail your future goals. Rather base your decisions on professional counsel, and educate yourself by reading some popular financial books.
- Track your spending: budgeting is obsolete if you don’t enforce it. At the end of each week or month, depending on your budget timeline, align your budget with your actual spending to see where you over or underspend, and adjust accordingly.
- Account for emergencies: rainy days can leave you soaked in debt if you didn’t plan for them. Allow room in your budget to put some money away for the unforeseen so you won’t need to rely on credit when these unexpected events roll around.
- Keep retirement in mind: while this might not be your biggest concern when you’re young, your future self will thank you if you make decisions in preparation for a successful retirement.
- Stay on top of your health: health concerns are some of the rainy day expenses that can really cost you. But if you budget for health insurance or medical aid and keep your health in check with regular doctor visits and healthy habits, you can help mitigate these events and spare your pocket the resulting expenses.
Considering Credit? Worry Not
Building a credit profile in South Africa may feel impossible when you are a recent graduate. However, there are ways you can acquire a car without having a credit history if you invest in graduate finance from financial service providers such as WesBank, which will help you land your hands on the car of your current dreams so that you make your main ones a reality. You can also build your credit by opening a store account or taking out a cell phone contract. Remember, creditors need to see a consistent paying customer in you when they are looking at offering you any kind of financial assistance, so always ensure you pay premiums in full and on time.
Calculate Expected Costs
One of the top money management tips that financial advisors and financial service providers give to customers is to make calculations on your expected expenses and premiums. Financial service providers such as WesBank have a calculator to help you calculate how much you will need to pay back if you take out graduate finance, for example.
You can make a big purchase depending on your affordability and credit qualification. However, when it comes to buying a car, you should consider graduate finance from financial service providers, and for all your other assets, remember to build your credit profile first and avoid having too many debts at one time. You want to appear trustworthy to lenders at all times.