The fresh grad guide to kick start your financial planning
Get a job
This is a give-away but still essential. Get a part-time job at Starbucks or telemarketing or similar whilst waiting for the replies from your future employer. You get to:
- Learn a new skill.
- Improve your communication skills.
- Meet new people. Who knows, you might even meet your future employer.
- Earn some extra cash.
Identify your spending profile
All of us have different short-term and long-term needs / goals. To get started we will have to first identify them. This may include study loans, contribution to your family, savings, transportation, and other lifestyle expenses including travelling and entertainment.
Determine possible concerns, start on emergency funds
Start on an emergency fund as soon as you get a job. I have known of people who swear upon it and people who think that it is a waste of resources. I think it is essential and will urge people to keep one. I set aside around 4 – 6 months of my monthly expenditure which could effective last me around 1 year if cut back to just the essentials. Do note that the emergency funds should expand according to your needs. Also, with the help of high interest rates, namely the OCBC 360 account with a maximum of 3.05% interest, there is no longer a reason not to keep an emergency fund.
Set your goals, start a plan
A goal without an action plan is a daydream. – Nathaniel Branden
Here are some possible approaches (with illustrations) to plan.
1. Save what you earn.
Save whatever that is left with at month end.
2. Li Ka-Shing’s method.
More information of this method can be found HERE.
3. Goals oriented
Calculated with goals and timeframe in mind.