How to Budget After Graduation
Now that you have graduated, one of the first things you’ll need to sort is your personal finances. Our guest contributor from Inspiring Interns, suggests five important steps to help you set up a budget.
Congratulations! You’ve crossed the finish line of your academic journey and are ready to embark on your post graduation life. Now, it’s time to step out into the big wide world and face one of the most important, but crucial life lessons – learning how to budget.
Photo by Mikhail Nilov at Pexels
Getting your budget nailed to a tee in the weeks after university can set you up for long-term financial stability and help you achieve both short-term and long-term goals. So, if you’re keen to get your finances in order, here are some useful tips to help you budget and get your finances in order:
1. Understand your expenses
The basic element of budgeting is getting to grips with your expenses. By categorising your expenses into fixed (e.g., rent, utilities, loan payments) and variable (e.g., groceries, holidays and activities – which fluctuate each month) you’ll have a better insight into where your money is being spent. Over time, you’ll start to get a clearer understanding of your spending habits and where you could potentially cut back and save.
2. Pay off your debts
When you receive your monthly paycheck, make it a priority to allocate a portion of your income towards debt repayments. This proactive approach will help you minimise the accumulation of interest over time.
By focusing on reducing your debts, your credit score will improve, opening up opportunities such as taking out a mortgage or additional personal loans, and you’ll also have more disposable income to spend on whatever you like. In time, taking this step will provide you with greater financial freedom and stability.
3. Automate saving
If you’re worried about transferring your money into a savings account, you may find it useful to use an automation tool to transfer funds from one account to another. The amount should be based on what’s left after your fixed expenses have been allocated. Decide how often you want the transfers to occur – this could be either weekly or monthly, depending on your situation. Be sure to review your savings progress and adjust the amount you’d like to save if necessary.
4. Track your spending
Incorporating budgeting apps or tools into your financial management routine can be a game-changer when it comes to tracking your expenses. They offer a range of features that shed light on where you may be overspending, and areas where you can cut back. Simply link your phone with your bank account and sort your expenses into categories. Think of it like having a virtual accountant, helping you stay on top of your spending habits. Some of the most common budgeting apps include MoneyHub and SNOOP.
5. Know when you’re spending more than you’re earning
One of the easiest ways to fall into debt is by spending more than you’re earning, which can happen when you fail to successfully budget. This is a common problem faced by thousands of students and graduates, but here are several ways to overcome it:
- Try to increase your earnings: if you are not yet in full-time work, try to get a temporary job or freelance to tide you over; if you are in permanent employment, look for a job with a higher salary.
- Reduce and/or delay your outgoings where possible.
- Get help by speaking to a financial advisor.
Disclaimer: This blog is for information only and does not constitute financial advice or recommendation. Do your own research and seek independent advice from a professional when required.
About the authors
Inspiring Interns is a leading graduate recruitment agency, which can help you land a job or internship that best suits your strengths and interests. Check out their website for the latest vacancies and careers advice.