The transition from being a student to being a worker consists of challenges a person may not have encountered before. The most glaring obstacle new graduates face is the issue of money: the when and where of earning/spending/saving it to make their newfound financial responsibilities somewhat more manageable.
Time Magazine’s Adulting Guide 2016 answers some of the most glaring questions about the student-to-worker transition –using queries they sought from new graduates themselves, of course. Here are a few of the magazine’s most notable responses:
- Spend money for food, rent and loan repayments, in that order. According to financial planners, new graduates should not be spending more than 15% of their salary (after taxes) paying off their debt, as it is a quick way to find themselves starving or short on cash during emergencies. Professionals from Rapid Loans weigh in by citing the importance of paying off private loans first, whenever a person has the money to do so. This helps trim down the interest rate and bring students closer to putting the debt behind them sooner.
- Save. People have heard it countless times before, but only a few can actually commit to their long-term financial plans. Spending habits in New Zealand are barely improving, and it is up to first-time earners to adopt a degree of financial acuity that lets them have a say in anything from when the next big purchase occurs to the quality and earliness of retirement. Keeping money in the bank is as basic as any financial guideline goes, and it is that way for a reason.
- Invest in stocks. After all the research and management, investing in the market is a simple way of creating long-term wealth. Though you cannot immediately rely on it to sustain your daily expenses or pay off your debt, having a diverse portfolio of assets to your name makes for a more lucrative way of saving your money for the future. Mutual funds are the best option for first-time buyers, as it does not require as much upkeep or risk-taking as other investments.
Money management expertise comes to people at different times in their lives, but college graduates consist of individuals most eager and most in need to learn about taking control of their financial future.