Top 3 Financial Hacks for Recent College Grads
For recent college grads, the most challenging thing apart from finding a new job is managing finances. Chances are you have never thought about financial planning, until now! So, learning some effective financial hacks can help you as you go down the road and look forward to living an exciting and independent life. Here, we have lined up three proven financial hacks that will make a great difference in how you are going to live your life now and in the upcoming years.
Work on creating a realistic budget in detail
The most effective financial habit that college grads can make is creating a realistic budget in detail. Right from the first month, you must check the amount you will take home (after taxes and other deductions) and figure out how much you can afford to spend monthly.
To create a realistic budget, first, think about essential expenses such as your rent, utility bills, groceries, transportation, and student & car loans if you have any. After that, you will know how much is left for other spending and savings.
Make sure to follow the rule: always spend less than you earn to stay debt-free.
Don’t wait for a few months or years for budget planning just because you want to spend your hard-earned money recklessly. Otherwise, it won’t take much time for credit companies to start calling you to repay the debt that you can’t pay. Once you reach that point, things can get really stressful.
Use your credit cards only when you know that you can pay them in full each month. This habit will be very helpful in having an excellent credit score that can further help you get loans at lower rates.
Many credit card companies offer various money-saving schemes. So, grab every opportunity to take advantage of saving money when you can by rewards, discounts, loyalty points, and cashback schemes. Every single penny that you save makes a big difference in the long run.
Start saving and investing now for a financially secured future
For you, the best time to start saving and investing is now; not after reaching your 30s. Those who wait miss out on a lot of potential earnings they could make if they have invested or saved right from the beginning. So, rather than regretting later, learn about different investments you can make at this stage.
Consult a financial advisor, if you need help. It is crucial, especially if stress-free retirement and/or buying a dream home are on your mind. At this point, you might not want to think about retirement. But the earlier you start saving for retirement, the lesser burden you will face later.
When saving money, don’t forget to keep some amount aside for an emergency fund every month. Make sure to create an emergency fund that is equivalent to the salary of at least three to six months. No matter how tempted you feel, use your emergency fund only for emergencies.
Evaluate Your Insurance Requirements
At this moment, you need to think about investing in a life insurance policy as well. At a young age, you can avail really cheap premiums. If you are planning to put off buying life insurance, you must know that premiums can get really expensive as you grow older.
Having life insurance will provide financial stability to you and peace of mind to your loved ones, especially if you are the sole breadwinner in the family or you are:
- carrying a student loan
- buying a new home
- buying a new vehicle
- having huge credit card debt and other consumer debts
- planning to get married in the near future
Some debts continue even if you pass away and your family members might be pressured to repay those debts. Life insurance will allow your loved ones to clear the debt without getting strained financially. It will act as a safety net for your family and bridge serious financial gaps after your passing.
Getting expert advice can be very helpful at this moment. Always read the fine print before purchasing an insurance policy to understand what you will be covered for and most necessarily what you will not be covered for.
New Age Insurance Brokers LLC is a highly reputable Dubai-based firm with a team of experienced and dedicated financial advisors and insurance experts who are always ready to help you with budget planning and find the best investment strategy and insurance policies that will make you happier and your life easier. So, if you feel stuck anywhere during financial planning, please feel free to get in touch with us.