Many fresh graduates make the mistake of thinking there’s so much time between now and retirement until they realize they are already hitting the forties. You don’t have to be a financial planner to know that it is never too early to start saving and that the best time to do this is when you land your first job. Saving is a good habit to develop, one that you will thank yourself for especially as you grow older. If you are a recent graduate or you are close to someone new in the workforce, feel free to read and share these financial planning tips.
- Go easy on lifestyle changes. Just because you are starting to make your own money doesn’t mean you have to splurge on things you couldn’t afford when you were still a student. There’s a thin line between rewarding yourself for your hard work and overindulging on things you do not really need.
- Create a budget. Now that you know how much you are earning post tax deduction, create a solid budget. Prioritize savings and stick to spending only what’s left. Stash an amount every pay day for planned expenses (like new shoes, gadget, vacations etc.) as well as unplanned expenses (car troubles, losing your job, illness etc).
- Set up retirement fund. Insurance policies and investments are cheaper to acquire in your youth than in years leading to retirement. Take advantage of this. Learn to invest properly and work with a financial planner in mapping out your money strategies.
- Stay away from debt. Generally, you should avoid debt especially if it’s meant to satisfy a want and not a need. However, it may be your only option for huge purchases, new business venture and investments. In such cases, just make sure you don’t get drowned in payments and interests. Also, pay debts on time and finish earlier if possible.
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Learn more about financial planning. The internet teems with information on managing personal finances and you can also find highly informative books on the subject. You can also talk to a financial planner to tailor your own plan. Educate yourself in this area and who knows, you might find yourself set for life even before retirement age.