Graduation day is a big moment for most people. It means the closing of a long and at times very challenging chapter that “opens” up the gates of adulthood.
This is the moment you´ve been waiting for the last three years or so, and finally, it’s graduation day! According to the education system, graduating means that’s you´re ready to take the next step to start the rest of your life and in good stead too.
It’s as if life assumes that we learned everything important about adulthood, such as financial planning and how to remain happy and healthy at university -but in reality, you can only discover that once you’re already doing it. Now you just graduated,
the critical question is this: what happens next?
For those of us who already cleared all the fogginess that comes after we´re told that adulthood began once we graduated, we allow ourselves to feel somewhat calm and remind ourselves that it was worth it in the end.
Do you remember the first days after graduation and remember how you managed to overcome the bad habits picked up in our student life to ensure a smooth transition into adulthood?
It was definitely not a smooth process, and sometimes we learnt financial life lessons the hard way. You are not alone with the making those mistakes and instead take a moment to consider all the people who were financially mis-sold a product and had to learn to be wiser with their financial decisions the next time a similar situation arose. The good thing is that we made it and now we should advise newcomers on how to make it too.
Now, back to the newly graduated. If everything regarding your “debut” as an adult looks blurry and uncertain, we can assure you that sometimes it feels like it only gets worse and that’s all normal thinking too. The good thing is that the experience is something we can all learn from.
It’s a long way to being financially independent, but here are the four basics of financial planning after graduating university that every new graduate should live by:
Your goals come first:
You may have finished college, but that’s no guarantee that you are 100% sure of the path to follow and this can be a significant, frustrating struggle if it doesn’t receive the right attention.
Financial planning matters a lot, but knowing what you want, when you want to get it, and how are you going to get itis also very important. One of the hardest things to do is to visualise oneself for the future.
Are you planning on retiring early, or working hard towards a pension to live your golden years relaxing comfortably? Or maybe you keep thinking about unexpected events and think that your priority is saving for an emergency?
Maybe you have a credit card or other type of credit? Well, adulthood is all about having a handful to cover all bases, so why not try to care for everything at the same time.
Of course, there are prospects about the future that you should also consider, like having a place of your own,maybe getting a car or travelling the world… the list can be infinite as each one of us has our own little dream goal and that’s fine. The thing is that you´re just starting a long road and there´s plenty of time, but for now, we advise you to think about the ones that involve wise financial planning, like these:
- Retirement? It’s never too early to start saving for that: The golden years may be far away, but they’re still there, so addressing the topic at this early stage is by all means the most advisable.
It doesn’t matter where you choose to save the money, you can start saving a little amount in a particular place around the house, or you can do the sensible thing and get a special bank account for this purpose. Just put any amount in it, it really doesn’t matter just yet, as the goal here is the following: first to start a saving habit that goes hand in hand with building a stronger sense of responsibility. Plus, with the interest rates these days, even saving as little as £10 can make a considerable difference ten years from now.
- Aim for a fresh, debt-free transition into adulthood: Graduation day isn’t over yet, but maybe you already owe money due to some credit or maybe you owe money to someone?
Well, if you reached adulthood with a steady job (congratulations), then try to focus your economic efforts into clear any debt you have lingering .In addition to the incredible peace of mind that not owing money to anyone brings, it also helps to build ones character and financial credibility for when the time to acquire substantial debt (for a greater purpose, like a house) arrives.
- It’s never a bad idea to have an emergency fund: As you start making these efforts to reach some knowledge on financial planning after college, it would be a good idea to have an emergency fund that should not be confused with your regular savings – remember that this one is for emergencies only. It can be tough to keep both funds untouched when we´re young and impulsive, but you must find a way to overcome the need to spend money unnecessarily. If that happens, then you have a solid base to deal with the unexpected, without compromising your new hard-earned job paychecks.
Financial planning equals strict budgeting
Having the prospect of earning a full-time job salary may be a great thing, and since we´re young, we may feel compelled to start wasting money on things that we think we need when that’s not really the case. Of course, sometimes you can treat yourself a little as there’s nothing wrong with that, but our recommendation here is that even though you are planning on spoiling yourself, you still need to make a budget for that. Having a detailed action plan about the destination of the money that you make is the best way to start your adulthood debut.
It is something that 30 years from now would still be as valid as a dose of good advice. Every time you create a budget you should do it like this: come up with a list of the money you owe and the money you receive and compare them.
Things start to complicate depending on each situation because you may be graduating and having a part-time job or you can be jobless. You could also still be living with your parents, so try to consider all of these factors before making a budget Also, there are many ways to come up with one, you just need to try and see which one suits your current situation more accordingly.
If you´re not sure about how to start making your budget, whether you´re employed or not, you should try to include the following:
- Rent: if you live with your parent´s, maybe you can discuss an amount that you can contribute, or make some sort of arrangement with them.
- Transportation: the monthly cost of your transport (if you use public transportation) or if you own a car, you should already know exactly how much gas your car consumes on a monthly basis.
- Savings: determine how much money you can save for both a general savings account and an emergency fund.
- Leisure: Here you can make estimates on how much money your entertainment costs monthly, see this as an area of improvement also.
This should be enough to start creating a habit of planning and saving. Now, as time passes by and your work sources begin to fluctuate, this method may include many more items, but hey, you´re just starting out, so there’s no need to rush things.
Find happiness by adding fun and leisure to your financial planning:
Yes, we have been inducted into adulthood and everything turns into a much more serious matter from this point onwards, however, there’s also something that you should not rule out and that’s having fun.
The good thing about being an adult is that you can embark yourself on an adventure of fun by way of entertaining activities without spending too much money, for instance:
If you enjoy going to bars every now and again, you can see how much advantage you can take from happy hours that way, you get your fun without wasting too much money.
Coupons: You can see what discounts and benefits are in your area, and you can start playing with your options to get better discounts and to save more money.
Swap going to the cinema for movie nights at home instead.
Graduation day is life’s way to tell you that you have enough knowledge to start building your future for the rest of your life. All the fun and games from before are in the past, and it’s time to face new challenges and duties, just like our parents did.
It’s ok to have a zillion doubts and hesitations, but don´t worry, it happens to the best of us. . It is a good thing to have those fears, as it actually means that you care enough for your future, so you´re up to life´s challenge.
The whole purpose of adulthood is to learn from our mistakes, so errors are not bad, it’s just fate telling us to try harder. Be brave and face reality with the best possible attitude. It’s a fun ride and we know that you´ll get the hang of it in the near future, but just be prepared for some lows to accompany the highs. That is just the way the cookie crumbles.