Fresh Grad Survival Guide: 5 Things To Do To Manage Your Finances
The first few years after graduation can be a make or break moment to one’s finances. Whether you have already secured a job or are still going through the job hunting process, keeping your personal finance in check is of utmost importance. Here are some of the things you need to do early in your adult life to manage your finances better.
Track your spending
Keeping track of your spending is a fundamental part of financial management. For some, this might be the first step to an independent life. Take note of where your money goes to get an accurate idea of your current financial standing. Once you have it, it will be easier for you to make smart lifestyle choices and adjust your budget according to your goals. Practicing this regularly also helps you become mindful of your expenses and allows you to strike a healthy balance between your wants and needs.
You may use the classic pen and paper to jot down your daily, monthly, or weekly expenses. Or you can download apps on your phone that will help you manage your budget better.
Invest in yourself
Investing in yourself is always a great idea. Remember, your first job isn’t always going to be your job for the rest of your life. Think more about building a career and not just a job by developing skills that will help you excel in your chosen field or to develop new ones to pursue your passion. There are plenty of short trainings and certification courses online that are available at your disposal.
On the other hand, investing in yourself through healthcare and insurance is also an excellent financial decision. This is helpful to people in their early 20s as insurance premiums are lower compared to those belonging in older age brackets. Securing healthcare insurance protects you from financial setbacks in case of a serious health emergency.
Pay off debt consistently
Debt is an inevitable part of everyone’s financial journey and that’s okay. In fact, acquiring debt sparks up your credit score, which you have to maintain in order to get a good credit standing. Pay off your loans consistently in order to keep your credit score high. A good credit score opens up more opportunities for you to acquire new credit which will be useful in the future.
A good strategy to reduce debt is to compartmentalize your monthly income the moment you receive it and pay your debt immediately. It is better to pay your debts early than paying them late. Crossing this off straightaway can give you motivation to pay off everything else consistently and before you know it, you’ve just completed all your payments.
Be wary of lifestyle creep
With your income getting higher as you move up the career ladder, lifestyle creep starts to kick in. This refers to a slow and gradual increase in consumption of non-essential items which, in turn, increases your standard of living. Through lifestyle creep, you may start feeling that luxury items become more of a right that you must have.
Keep lifestyle creep in check by setting up a limit to your monthly expenses. Make sure to always weigh the pros and cons whenever you’re making big purchases. You may also divert your excess income to investments as the less available money you have at hand, the less likely it is for lifestyle creep to eat up your wealth.
Start saving as early as today
Your early 20s is the best time to start your savings journey. At a young age, you won’t have to set aside exorbitant amounts just to keep up with your saving goals. Start by setting aside at least 10% of your income each time you receive your paycheck. That way, you’re sure that you’re slowly working your way towards financial freedom.
Additionally, make sure that you keep your savings where you can get more value from it. With CIMB Bank, you can be sure that you can get the best-in-market interest rate of 4% p.a in three ways! For students and fresh grads aged 18-25 years old as of March 1, 2021, the CIMB Savings Starter Pack lets you enjoy a higher interest in your UpSave and/or verified GSave account. All you need to do is deposit at least PHP 500 each month. Plus, you can get a Personal Accident Insurance coverage worth PHP 50,000 for FREE.
Another way to get 4% p.a. interest rate on your savings is to maintain a minimum balance of PHP 100,000 in your UpSave and/or GSave account. Or you can grow your Average Daily Balance (ADB) by PHP 1,000 each month to enjoy a higher rate on your savings. Plus, if you maintain a minimum of PHP 5,000 in your account, you are eligible for FREE Life Insurance coverage that’s worth your ADB up to PHP 250,000.
Visit this link to learn more about the CIMB Savings Starter Pack.
Deposits are insured by PDIC up to P500,000 per depositor.
CIMB Bank Philippines Inc. is regulated by the Bangko Sentral ng Pilipinas. You may contact the BSP Financial Consumer Protection Department at (+632)8708-7087 or email@example.com.