5 Tips for Money Handling as a Fresh Graduate: Breaking the Generation Broke Culture

Being a fresh graduate, you are now officially responsible to bring in money to support yourself. However, the first decade out of the university may define your financial future, which is why it is so important to wise up and plan for your future.

Listed below are 5 mistakes fresh graduates are making and suggestions on how to avoid it.

1. “This is MY life and MY paycheck.”

Tamara Darut and Javier Silva, the authors of the paper “Generation Broke” say that, “Earnings of young adults have not kept up with inflation or the price of basic necessities.” With your first few paychecks, you will find yourself excited over things you can buy with it. After all, this is your own hard work and a step toward independence. A reward or two for yourself shouldn’t hurt right? However, that mindset can bloom into a big mistake.

It is important to recognize the actual size of your paycheck. Distinguish first if it is something you actually need or something you just want. Buying that new shiny gadget will make your life seem luxurious but living experiences make your richer as a person.

2. “Budget? Nah.”

You might not see how budgeting applies for you or you might think that it’s just a waste of time but remember those “petsa de peligro”? Those are the days before your next paycheck that you are just so broke that you resort to eating a pack of crackers or biscuit just to fill your tummy. Those night outs every weekend might just be draining your wallet so fast that you won’t even realize you won’t have enough for the rest of the week.

Always keep track of your expenses. Surely, you can relax once in a while to get away from work but there are ways to relax without spending too much. Plan out your bills and if you can, your everyday expenses on your notebook, laptop or an app in your phone.

3. “I have a stable job. I don’t think I need to save.”

While budgeting will help you to allocate your finance efficiently to your bills, food and other expenses, saving up a percentage of your paycheck goes a long way. This can fund your eventual retirement or other investments. It can also save you when an emergency situation arises.
A finance professional once said that you shouldn’t save what is left from your paycheck but your savings should be part of your budget. You might have heard that you should allot 10% for your savings. If you can’t live with 90% of your paycheck, you most probably can’t live with a 100%. Saving up is also a discipline for yourself.

4. Invest in your Skills

Investing in yourself is also investing for the future. It will help you improve yourself and those skills can be deemed useful later on in your life. This can also be a way to earn more. Find something you’re already skilled at and improve on it. Go to cooking or language classes and seminars. Extra knowledge doesn’t hurt! This might also open up a new opportunity for you.

5. See yourself not only for this month

A long-term for yourself can give you a motivation for your life. You won’t be staying on the same page for the rest of your life. You will either be going for your dreams or just nowhere. Your hard work will mean so much more if you it is for your goal. You might not even have the motivation to do the things above if you don’t have a goal.
This requires perseverance, patience and hard work because you won’t be able to see your long-term goal in just a month or two.

The university life has ended and a new chapter has started: being a fresh graduate and finally working. Of course, this article does not cover everything you need to know about being independent and handling your paycheck. Life experiences will teach you that. However, the five tips above are also an important way to be able to at least gear yourself up and prepare.