We all have to manage our personal finances; after deductions, your pay check has to support you until you receive the next month’s salary and let’s face it, some of us are better at money management than others. If you are newly graduated and are grappling with managing your finances, here are a few tips.
- Make your money work for you – There are, for example, bonus savings accounts that earn you more interest than a regular savings account. If you are interested in investments, there is a lot of free resources online to help you get started with a basic investment portfolio and that is the first step to generating wealth.
- List all expenses – Create two expenditure lists; essential and non-essential expenses; it is only when you do this that you can clearly see what costs you can reduce and which expenses have to be incurred.
- Be careful with credit cards – Lenders make it very appealing to use credit cards and without a level of self-discipline, it is very easy to fall into debt. You probably know that you only pay interest when card payments are overdue, so prompt payment eliminates cost charges. If you are the kind of person who loves buying things, perhaps credit cards are not a good idea, as you can very easily find yourself behind with card payments. Here are some important factors to take into account when applying for credit cards.
- Travelling costs – If you drive to work on a daily basis, there might be cheaper ways to get to and from your place of employment. Have you considered investing in a mountain bike? This will not only save you money, it will also get you fit.
- Setting savings goals – If you don’t set savings goals, it is harder to save money. If you have issues with this, we recommend talking to a financial adviser, who can assist you in setting short and long-term goals.
- Additional income – While it is always a good idea to cut your expenses, let’s not forget looking at ways to supplement your income. If there is OT available at your work, why not do those extra hours; one aspect of working overtime that people often overlook is that when working, you are not spending money! If you are a native English speaker, you could work online as an English teacher, which is great fun and very rewarding.
- Create a wealth generation plan – When you are not focused on acquiring wealth, it is hard to make any progress; if you have some disposable income, now is the right time to talk to a financial adviser. The financial expert can help you create a long-term wealth generation plan and that should go a long way towards a secure retirement.
Like it or not, money makes the world go around and we all have to balance our personal finances, which should leave you some funds to invest for the future.