Financial planning for fresh college graduates: 8 things you should remember
Being frugal is the start if you want to reap the fruits of your labor in the future
SO you landed your first job, with sheer luck and determination of finding your ideal job in the many companies and job fairs you had attended, participated and applied with.
Now that you have stepped into the real world, out of the four corners of the classrooms from your alma mater. I congratulate you for stepping out of your comfort zone and becoming a more mature person on taking the responsibilities of finding employment, even if it is a temporary or permanent job in helping your immediate household.
You are very excited on your first sweldo or salary as a trainee on the company that hired you even if it is just enough for a single person. But let me ask you something, can you survive without asking your parents for extra money? Yes it is possible, when working out a budget plan and being frugal would be an ideal learning experience for being independent from your parents. But parents are still willing to help you on your feet and spare some cash on your first few months at work ’til you are already receiving your monthly sweldo and becoming a regular employee.
It will be hard fought decisions of weighing the pros and cons of needs and wants. There is nothing wrong in sipping one cup of Starbucks coffee once a week or watching a very good movie with your friends, but if you do intend to this daily, it will bore a hole in your wallet, leading to expenses.
Spending encourages economic activity in the market with consumer confidence soaring high lately.
1. Change your mindset—It is ideal for young people to rethink and reprogram about their understanding on money. At school, we were never taught about principles of personal investing but think again of re-educating yourself about personal finance
2. Create a budget plan—This one is a very hard discipline to follow and it requires a lot of planning and monitoring on your spending on the next 15 days before your salary runs out.
3. Open a bank account—Better to start up opening a bank account with a booklet, not the ATM type of account, because you might end up spending your money. This is just the beginning of building your cash reserves in times of emergency. It should at least take a minimum of three months to a maximum of six to eight months but for more extreme savers up to 1 year if something happens to you from loss of job, got into an accident etc.
4. Save a percentage of your earnings—Once, you open that booklet bank account, you better start saving some of your cash. Let say you earn about P12,000 per month net, you can start by P500 to P1,000. You can use and utilize the 10-20-70 budgeting plan concepts wherein 10 percent is for your contingency fund, 20 percent personal spending and 70 percent for utilities. These can be modifiable in your terms.
5. Stay away from temptations—There are lots of temptation around, for women shopping is one reason they get indebted without thinking then feeling guilty at the end. Men also have lots of temptation from vices that are unproductive and destructive. There is nothing wrong in joining up for a night of a festive mood and you are feeling that party swing. Yet you can go out as long you have done careful study and plan on the cash you will be spending, as long as you stick with your budget limit.
6. Be open minded— Keep learning, read new books on personal finance investments or attend enriching seminars which can be useful in the near future. If you need advice from a financial advisor or consultant about the technicalities of investing. They can help you out a lot in terms of planning and investing.
7. Seek sideline work or engage in business—If you have time spare and want to utilize it. You can seek employment on your spare time with multilevel marketing group as a sales person which may be the start of yourself as a budding entrepreneur or a freelancer with online outsourcing companies which requires four hours or less of your time.
8. Dreams have deadlines—Remember that every dream have deadline in which goals should be accomplished on a given timetable. From setting your career to buying your first laptop or getting your mutual fund or unit investment trust fund as your first investment, etc.
Being frugal is the start if you want to reap the fruits of your labor in the future. Don’t forget that losing that glimmer of hope can make you pessimistic about your life, your job and career.
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Benedict Baluyot is a Registered Financial Planner of RFP Philippines. He is professional real estate broker with specialization in project selling and general brokerage of different estate properties from different local and national developers in Pamapanga and Metro Manila residential and condominium projects.
Source: http://www.businessmirror.com.ph/index.php/en/business/banking-finance/15459-financial-planning-for-fresh-college-graduates-8-things-you-should-remember
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