7 Important Personal Finance Lessons Every Fresh Graduate Should Learn

The reality of an independent life after school makes financial lessons more vital for every fresh tertiary institution graduate. Creating a good financial plan can help set you up on a path toward financial success after school life. We’ve put together few tips that will help you navigate through the reality of financial life after school.

• Create a Financial Priority List: make your own money priority list that helps you prioritize your savings, spending, investment, debt payment, retirement plans & the likes.
• Practice the 50/30/20 Financial Planning Rule: 50% of your budget on essentials such as rent, student loan debt, food, utilities, health etc. 30% on nonessential expenses like eating out, shopping, etc. And 20% savings, emergency funds & investments.
• Make Budgeting a Habit: not learning about budgeting can leave you at a disadvantage as a fresh graduate. Therefore, create a spending and saving guide so you can always know how to manage your money to help you achieve your financial goals. You can kick off by keeping track of all your expenses every month.
• Make Moves to Create other Streams of Income: Don’t just rely on the monthly pay you get as a fresh graduate. Instead, create other streams of income by partaking in the side gig economy. And keep in mind never to use earning extra as an avenue to spend more. Rather, use it to boost your savings and investment power to steadily grow your financial portfolio.
• Explore the Power of Compounding Interest: By putting aside small sums of money in a high-interest investment or savings account as a fresh graduate, you can start building wealth that will compound repeatedly in the long-term.
• Learn Investment and Stock Market Basics: learn to understand what the stock market is, how it works and how investors make (and lose) money. Don’t miss out on building wealth steadily with stocks, since you don’t necessarily need to invest a lot of money to start early.
• Learn How to Start and Run a Business: There are lots of online courses on entrepreneurship and even books like Rich Dad, Poor Dad that can give you basic insights into business and money management. Subscribing to these inturn boosts your earning power and financial management skills.

And finally, make plans to constantly invest in yourself to improve your prospects for growth and increased income. Set aside a certain amount of money each month to improve your performance level in your areas of strength and profession. Enroll for personal development such as online classes, pieces of training, books, industry certifications and seminars.