Fresh Grad 101: How to Start Saving & Become Financially Free
You’ve just graduated and are looking to land your first job. You imagine yourself finally earning your own keep, buying all the things you could never get on an undergrad allowance.
But wait, before you know it, you are in your 30s with close to zero savings, no house and travelling the world on borrowed money.
It’s very likely that no one taught you about financial freedom in the years you spent at university. So how do you achieve the freedom to do what you want without worrying about your bank balance?
Control the Urge to Splurge
Short-term splurging on food, drinks, shopping and travel will leave you with less money to set aside for savings — or none at all. By the time you’re aged 50, you’ll be stuck with loans and bills with no retirement portfolio.
Watch your spending and leverage the power of compound interest while you’re still in your twenties. Turn $100 into $200, $200 into $400, and so on. If you start controlling your spending and saving now, the growth of your money will speed up and earn you more in the long run. The more you save, the faster you can live life on your terms.
The biggest challenge you will face when you get your first paycheck is to stop yourself from upgrading your lifestyle and blowing all your cash. Going from a monthly allowance of $500 to a monthly salary of $2,800 will tempt you to boost your lifestyle with a bigger shopping budget, weekly TGIF drinks and more regular cab rides.
However, these numbers can all add up to an extra few hundred dollars each month. If you’re not careful, it might leave you with little in your bank account at the end of each month. Instead of spending everything you’ve earned and saving what’s leftover, switch your approach: save a set percentage of your wage first. Keep track of your expenses and you will soon find a healthy savings amount piling up.
Make Your Hours Count
Enjoying the lull period between graduation and the working world? Don’t waste it! Apply for part time jobs such as driving with Grab to earn money on the side. Not only does being a Grab driver give you the convenience of driving to your job interviews, it also makes sure that every free hour you have counts.
On the way back from an interview? Why not spend a few more hours on the road to earn some extra money?
Be Wary of Fixed Expenses
Fixed expenses are items that cost you the same amount every month. Once added to your monthly expenditure, they are not easily adjusted or removed. You may want to purchase a car but can you afford to fork out a certain sum for it every month?
If you would like the convenience of a car, sign up to be a ride-hailing driver! It gives you a car that pays for itself — and more, with the ability to earn up to $38 per hour.
So stop waiting and start on the road to financial independence today.