So you’ve just graduated and landed your first full time gig which means you’re about to get your first full-time pay packet.
Whoo hoo! It’s time to celebrate. While giving yourself permission to spend up big on yourself is okay for a short period of time, you don’t want to get into the habit of regularly blowing your salary by the end of the first week.
Here’s some tips that will help you develop the love of budgeting as much as you love $10 burger night at the pub.
Know your current financial snapshot
Student life is a tonne of fun, whether it’s night out at the uni bar, getting involved in social clubs and sports teams or simply grabbing coffee with your classmates. But no matter how big or little of an effect all that fun had on your current finances – it’s always good to have a look at where you’re at once you swap morning classes for morning meetings.
As a first step, map out how much money you have at present and what you owe. Then, review your banking products. Does your bank account have the features you need for your working life, are you getting a competitive savings interest rate? Weigh up your banking options now and make the switch to make sure that you’re paying no or low fees and earning interest.
Prioritize paying down debt
Chances are you may have relied on some sort of student loan to help get you through college, which you now need to start paying back. What you owe should be high up on your post university to-do list, because the sooner you farewell debt, the sooner you can start saving your money and living your best life!
Just remember to make sure you get every loan repayment in on time, that way you’ll avoid being stung with late payment fees. Also keep in mind that the longer you take to pay back your debt, the more interest it packs on over time.
Work on building up a good credit score
Building up a good credit score when you are fresh out of college is super important. Having a good credit score can mean that when it comes time to borrowing money for a mortgage or car later down the track, you’re likely to get cheaper interest rates and more options to choose from. Any current bills you have, whether that’s phone bills, credit card, buy now pay later installments or even streaming membership fees, ensure you pay these when they are due.
And also remember, credit reporting agencies and banks can often track a lot of your spending activity. So before you buy another round at the pub on a Saturday night, make sure that all of your financial commitments are taken care of first.
Map out a spending plan
What are your spending goals now that you’ve got a steady salary? Do you want to finally leave the nest and move out, or are you wanting to purchase your first car?
By mapping out the expenses you’re going to have will enable you to also hone in on the areas that you’ll be able to trim away some of the excess spending. Not sure where to start? If you need a little extra help, check out Mozo’s budgeting tool or download a budgeting app which can crunch the numbers for you!
Always set aside fun money
Bad budgets are like bad diets, if you’re too restrictive it won’t be long before you go on a binge and blow all of your hard work. It’s important to set aside money for the things you enjoy doing. But it can be hard to prioritize saving so one of the best things you can get into the habit of doing every payday is to pay yourself first. Think of it this way, if you put away $200 a month for a whole year, you’d have at least $2,400 in savings. That could be a plane ticket, or two!
There are plenty of other ways to kick start your savings too. You could go old school and make small changes like opting for generic brands when grocery shopping or only eating out one a week.
It’s a good idea to keep your savings stash out of easy access from your everyday transaction account. You don’t want to have the temptation of being able to dip into it easily. It should be seen as more a “rainy day” fund not a “I’ll dip into this every week to pay my rent” account.
Author bio: Polly Fleeting
Polly Fleeting is a Money Writer at financial comparison site mozo.com.au. Whether it’s helping fresh graduates find savvy ways to save or searching for the hottest travel money options, Polly keeps her readers informed so they can live life and make better financial choices. When she’s not finding out the latest banking news, or writing up in-depth money guides, you’ll find her out to coffee with friends or at home searching for her next holiday destination.