Fresh Grad Survival Guide: What You Need To Know On Personal Finance Post-Uni

If you’re a fresh graduate who’s just started job hunting then keeping your personal finance in check is of utmost importance. Upon passing the hurdle of securing a job, you should pay extra attention to the way you manage your money and that includes everything from banking and budgeting to investing and paying for your insurance.

Once you step into the working world, you probably won’t be getting any more allowances from your parents so the best thing you can do for yourself right now is to start taking your personal finances into your own hands.

In order to make the right financial decisions, you need to first start by laying down certain monetary fundamentals that will be sure to benefit you in the long run. If you’re unsure of where to even begin, here are some sure-fire tips and tricks to save money, pay off your existing debts and student loans, and manage your personal finance!

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Know your expenditure to manage your pay

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“When I graduated two years ago, I realised knowing and tracking my expenditure helped a lot. Figuring out how much is needed for transportation, food expenditure, purchasing insurances, paying off debts, or managing credit card expenses is important,” says 27-year-old, financial consultant at finexis advisory, Rayner Ng. “There are many personal finance mobile applications, such as Seedly and Wally, to help you track your expenditure. “

This seems like a no-brainer but making smart lifestyle choices and adjusting your monthly budget accordingly could be a life-changer. Splurging on things you want but don’t necessarily need may leave you strapped for cash at the end of the month so it’s important to be mindful of your purchases. If you’re able to strike a healthy balance between your needs and your wants then you are well on your way to managing your pay well.

Start saving money

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By now, budgeting should be something you are familiar with. Assuming you had a part-time job in college or university, the transition from managing an income that pays hourly to a considerably bigger income from your full-time job may be tough at first. It will take some time and experimentation for you to figure out a comfortable portion of income to set aside to save.

“I dedicate a fixed amount of my salary to my savings every month. For me, it’s 20% of my monthly income, but I know of friends who allocate more,” says 24-year-old, Denise Chong, who graduated from Nanyang Technological University last year.

By dutifully setting aside a good amount of your pay every month, you will have accumulated an emergency or ‘rainy day’ fund over time and that will certainly come in handy when you need it most. It is crucial that you start preparing for the future by saving up for big ticket items, including buying a home, getting married and preparing for your retirement in the future. The money you’ve saved up will certainly come in handy when you hit these big milestones in life.

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Open a savings account

By opting for the ideal savings account, you are ensuring that you get the best possible rate every time you deposit your pay cheque. This will not only help you generate extra interest in your savings over time but it will also give you flexibility for emergencies as you won’t have to pay penalty fees when withdrawing a large sum of money for that purpose. The latter will ensure that you stay out of debt and reduce the amount you would need to put on your credit card during an emergency.

“Each bank is unique with its distinctive interest rates. You have to do your homework and compare between the banks to find out the ideal savings account for you,” Ng adds. “You could ask your friends, families or even consultants. Often, how much you have will determine which bank account you will sign up for.”

Get insured

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Buying your first insurance is critical as you need to make sure that you are getting sufficient coverage for yourself. Before you sign for an insurance policy, you need to conduct adequate research on the different types of insurance out there so you are fully aware of what you are paying for.

If anything, health insurance should always be the first priority as it helps pay your bills if you were to injure yourself or suffer from certain illnesses. Remember that being insured keeps you financially secure in the event of an unfortunate accident!

Make smart investments

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While there are plenty of preconceived notions about making an investment, investing is actually a valuable tool in your long-term financial plan because it allows your money to create added value for you. That being said, you should be fully aware of your own financial health before you start embarking on your first investment journey.

Try not to be too rash when it comes to making investments as there are an abundance of risks that come with being overly impulsive on that front. Needless to say, you have to be realistic about the investments you make because you can’t expect to be making insane profits from the get-go.

If you are still clueless about this, seek out professional help from financial consultants or from someone credible.

Pay off your debts consistently

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Lastly, the key to being successful in managing your own personal finance is to clear off your debts fast and effectively, and this includes your student loan. A useful method of paying off your debts as quickly as possible would be making a list of the money you owe in chronological order from the smallest to the largest sum.

For fresh graduate, 25-year-old Jerome Cornelius Selvan, who is now working full-time at Apple Singapore, being disciplined is key to paying off your debts. “There is no cookie cutter way to cheat work, school or play. Taking ownership is important,” he adds. “I also realised that when you start earning income, you lose money REALLY quickly. I make it a point to compartmentalise my financial output to ensure that I save enough to pay off any loans.”

Start by setting aside money from your monthly salary each month to the smallest debt on the list and eliminate a new one as you go along. Having crossed off a new debt each month, you’ll feel more motivated to pay everything else off and before you know it, you’ll be cancelling off your biggest debt.

Ler Jun

Full-time storyteller. Avid coffee-drinker.

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