Graduating from the university means that you are now ready to face the real life, paying bills, being more responsible and paying taxes. If you are almost graduating, it will be wise if you start thinking about financial management early and prepare yourself for money management.
After you graduate, your parent won’t pay for your aurora tutoring anymore or give frequent pocket money. It’s about time you learn how to manage and go about your finances if you want to survive in the real world. Here are some steps to ensure that:
- Know What You Need to Save For
The first step you need to take toward managing your finances is setting a goal and decide what you want to achieve. Whether it’s a car, a holiday, buying property, or planning your retirement, you need an articulate saving plan.
You need to make sure that whatever goals you set are achievable and that those goals won’t leave you financially uncomfortable. Weigh your goals and categorize them based on their urgency and timescales. For example, a retirement plan is a long-term goal while buying a car or renting an apartment is a short-term goal.
- Set Measurable Goals
Achieving measurable goals than unrealistic goals is easy. You can set measurable goals by deciding how much you need and when you will need it. The goal has to be realistic for it to be achievable. If you need a massive amount of money in a short span of time, you will incur financial strain upon yourself.
Budgeting allows you to assess your current financial situation and wisely manage your money. Create a list of your monthly income and work out your expenses per month. The expenses should include one-off expense like maintenance and insurance payment.
Budgeting will allow you to determine what you need to cut back on and the day-to-day expenses you need to cover. You don’t have to go to a coffee shop daily; you can just make coffee at home. Carry homemade lunch to work instead of going to a diner. You can also work out the amount you want to put away every month without straining yourself financially.
- Savings and Investments
When you start working after university, you will have to decide whether you want to save or invest your money. If you ‘re going to generate a considerable amount of money, you will have to opt for saving that way you can receive an additional percentage interest. Saving means that the risk of losing that money is so little and therefore you can take longer to see your goals through and maybe make an investment eventually.
To invest, you have to commit a certain amount of money to an asset so that you can increase your overall amount. However, it is essential to choose a level of risk you are comfortable with because investments can fluctuate. You need to always consider the risks before embarking on an investment journey.
You need to make sure that you base all your goals on what you intend to achieve, the timeframe you would want to reach it, the level of returns you expect to receive and any risks that are associated with your choice.