The real world…
Congratulations! There you are in your cap and gown, degree in hand. This is what you’ve been working towards these past few years. So… What’s next?
Completing tertiary study can be both the most exciting AND daunting time of a graduate’s life. Some may head off for post-study travel (read our article on debt lag) but for most, graduation marks the transition to their chosen career and first step into the ‘real world’.
Getting started
Finding a job will be top of mind for most graduates. The first challenge could be expectations vs the reality of the job market, however a 2016 student survey founds:
It seems the future of our workforce is in good hands!
Becoming independent
This is also a time when some young adults move out of home. Perhaps you need to relocate for a job or it’s simply time for independence? Regardless of the reason, learning to be responsible for our own finances and expenses for the first time in our life can be confronting.
It’s important to plan, budget and consider all costs you will incur BEFORE you move, including:
If you have an informal arrangement in a share house, there are usually no real legal ties. If you sign a lease there are binding legal and financial obligations. If you are sub-letting under your lease YOU are responsible for the care and upkeep of the property. Make sure you understand what you’re signing.
How to manage AND get ahead
What are the ‘golden rules’ to help you manage your money AND protect your financial future?
1. Create a budget and live by it
Try to divide your salary into 50% for essentials, 30% for lifestyle and 20% for savings. If you can’t manage to live AND save perhaps revise your plans?
2. Avoid ‘dumb’ debt
Credit and store cards can lead to a financial disaster. If you have a credit card ensure you are disciplined about usage and repayments.
3. Protect your credit rating
Pay your bills on time – that means BEFORE the bill is due – not at the 2nd final notice! Poor financial habits could affect your ability to qualify for a home loan.
4. Don’t ignore superannuation
It’s wise to understand NOW the role super could play in your future. It should be part of your financial planning from your 20s – not your 40s.
Remember your student loan…
This can be the ‘elephant in the room’ for students, so what are the facts? Compulsory repayments through your tax return are required when your income exceeds a minimum repayment threshold. You can also make voluntary payments at any time. Student loan repayments should be factored into your long term financial planning.
As of January 2016, if you have moved overseas your repayment obligations will remain the same as if you are living in Australia.
Protecting your future
Living life on a single income could leave you open to one critical risk you may not have considered. How would you afford your lifestyle if something happens to you and you cannot work. How do you protect the income you are now dependent on?
We don’t think about anything going wrong when we’re young and healthy. If you would like to understand how to protect your income we’re always here for a chat.
If you have graduating from who would benefit from this article ask us for a copy to send onto them!