Welcome to leave campus and enter the real world. This is exciting and anxious. The future has infinite possibilities, but it is also full of unknowns. There are countless opportunities waiting for you, but you will also face many new challenges. For example: managing your income, expenses and various financial problems. For you who have just started working and have income, now is also a good time to learn financial management. So as a “newbie” who has just graduated, how can we start from the still thin economic foundation and increase our wealth bit by bit?
Everyone wants to better manage their finances and achieve financial independence. Here are a few tips for you:
Create a budget
No matter what your future income will be, you should make a realistic budget based on your current income and live within your means. Assuming your current monthly income is 5,000 yuan, your expenses, savings, and investments should not exceed this number. Maybe making a budget means setting limits, but after a while, you will be pleasantly surprised to find how much convenience a budget can bring to your life.
Ads-ADVERTISEMENT
Ads-ADVERTISEMENT
You can create a monthly budget by following these steps:
- Calculate income: including remuneration from full-time and part-time jobs, regular income from financial products such as funds, financial management, government bonds, etc.
- Evaluate your expenses: Make a list of all your expenses, including rent, food, transportation, social activities, etc. Look at the list objectively and divide your expenses into “wants” and “needs.” If you are a contractor or freelancer, don’t forget to pay taxes.
- Pay attention to and adjust your budget: Once you start tracking your expenses, you will be surprised where your money goes. Carefully sort out your expenses and eliminate unnecessary spending. Sometimes it is easier to reduce expenses than to cut costs. You can flexibly adjust your budget at any time according to your needs.
There are many free tools and apps that can help you create and track your budget. Using these tools can help you spend more within your budget. It’s worth giving it a try.
Set aside emergency funds
Put three to six months of basic living expenses in a savings account as an emergency fund for when you need it.
We have no way of knowing which will come first, tomorrow or an accident, from small things like repairing mobile phones and cars to big things like unemployment and illness. If we don’t have the habit of setting aside backup funds, then once we are in urgent need of money, not only will it be difficult to cope with the accident, but we may also be unable to repay the loan on time, resulting in fines or high interest.
Maintain a good credit record
Even if you don’t have a high income right now, you can apply for a credit card. A good credit record can help you apply for a loan faster when buying a house or a car, and you can also get a higher loan limit and a lower interest rate. Paying bills on time and using credit cards wisely are the keys to maintaining a healthy credit record.
Optimize savings
One of the easiest ways to build savings is to set up a regular, automatic deposit schedule. You can aim to save 15% to 20% of your income, or start with a lower percentage and increase it slightly every few months as your income and expenses allow.
Ads-ADVERTISEMENT
Ads-ADVERTISEMENT
Investing in the future
Once you have an emergency fund, sufficient savings, and financial stability, you can start investing. Starting early can bring huge long-term benefits. It is recommended to do a lot of research before making an investment choice that suits your financial situation. Pay attention to purchasing financial products from formal channels to protect your information and property security.
Reward yourself appropriately
Planning for life after graduation doesn’t mean you have to live as frugally as possible. Instead, you should strive to strike a balance between maintaining a stable income and enjoying life, and gradually achieve financial independence. It’s also necessary to reward yourself occasionally.
This requires you to try to add more room for maneuver in your budget. Rewards do not mean extravagance and splurge. Don’t be stingy with your encouragement, but be clear about what is really important to you. Finding a balance between adhering to the budget and enjoying yourself appropriately will help motivate yourself to work hard.
Life in the new society is exciting, novel and full of challenges. When you have just graduated and started working and are looking forward to the future, smart and reasonable financial planning is particularly important. I hope these tips can help you start from small things, gradually develop good financial management habits, form a scientific financial management awareness, and better lay a foundation for the future.