College graduates and recent high school grads are entering the workforce these days have more than their fair share of problems – unemployment is high, wages are low and costs are spiraling upwards as inflation rears its ugly head. These negative factors are beyond your control, yet there are things you can take control of which will ensure that you start off your career in good financial standing: monthly savings and long-term financial planning are the key things you need to do to get off to a good start.
When you finally get a job and starting bringing in paychecks it is important that you don’t immediately spend everything you earn. Instead, you need to earmark a percentage of your earnings for your savings account – this can be quite difficult especially with wages where they are, yet it is absolutely crucial to save for the future. You should try to put away up to 25 per cent of your monthly wage, though anything above 10 per cent is good enough.
If you have recently graduated from college you are likely to have some student debt left over. It is important that you endeavor to pay this off as quickly as possible as you can’t really start saving until you are out of the red. If you have multiple loans it is also worth considering a debt consolidation loan which can help you get a lower interest rate.
Finally, you need to do some astute financial planning – When you save money you are starting to plan for your retirement, not just the next few years. So sit down with a pad and paper and figure out when you want to retire and how much you need to put away before then, this doesn’t have to be exact yet, it will just give you an idea of how much you need to save over the coming years.
There is no telling how external factors may affect your future, yet you can control how you start your financial life. So as you enter the workforce be sure to get off on the right foot, you will reap the financial rewards later.