It’s a big transition figuring out how to navigate the world after you’ve graduated. Getting your ducks in a row financially is one place to begin.
Here’s 9 steps you can take to set up your financial future for success.
Look for a job
Making money is a priority right now – and job-hunting involves a strategic, multi-pronged approach. First, tap into your existing networks: finding a job is often about who you know. Secondly, set up job alerts on the main jobs boards, and join Facebook groups in your industry – which can be great for those job leads that aren’t advertised. Don’t forget to follow up on applications and with recruiters and track the progress of your applications. Use LinkedIn, Seek, etc.
Create a budget
While not the sexiest of tasks, creating a budget provides a big picture on where you are financially and gives you permission to spend on things that are important to you. Start with a budget planner or grab a notebook and your last three months’ worth of bank statements. Jot down everything you’ve spent to work out what your monthly expenses are. You might think you only spend $150 on groceries per week, only to find it’s closer to $200 with all the little ‘top-up’ trips you do. Similarly, morning coffees, transport, car expenses and subscriptions (hello, streaming service) can all quickly add up.
Map out when you’ll pay what
If you’re living out of home for the first time, keeping track of all the expenses can seem overwhelming at first. And given things like utility bills can arrive by post, via email or even taken straight out of your account as direct debits, it’s easy to lose track of what you need to pay and when. But with a budget in hand, you’ll know what you need to set aside each month. If you have enough in your account, set up direct debits – or create a bill reminder system via a calendar (or smartphone reminders), so you never miss a due date.
Look into any entitlements
If you’re fresh out of uni or college and setting yourself up with a job and a place to live, you might be able to get some government assistance while you do. You could check if you’re eligible for rent assistance, or cheaper healthcare. And, if you’re aged between 16 and 21 and are studying part-time and seeking work, or looking for full-time work, you may be eligible for Youth Allowance payments as well.
Open a separate savings account
Establishing good savings habits from the get-go is essential – and it’ll train you to plan for big ticket items, like a car or property. Look at where you can cut back on your expenses, and save the extra into your separate account, or set up direct debits straight from your salary to start building your nest egg. Check if your lender has savings accounts with round-up facilities, so when you make a purchase, the account rounds it up to the nearest $1 or $5 and deposits the extra bit into your savings. It’s a neat trick to help you save more over time.
Start an emergency fund
Planning for a rainy day is what your emergency fund is all about. Experts suggest aiming for around 3 months’ worth of expenses, so you’re covered if the washing machine dies, you lose your job or need to pay for something unexpected. It’ll also mean you’ll have the funds ready to cover any eventuality – without resorting to loans or credit cards. You can build your emergency fund slowly and it’s best to do it in a separate account you can’t easily access.
Credit or debit card?
Some people use credit cards to budget, pay for bills and other expenses. Others prefer to have one just for emergencies. While credit cards can be very convenient, it’s easy to get into credit card debt if you’re not diligent about paying your card off each month and avoiding interest. If you’re concerned about getting into debt, you may find a debit card suits you better – this is a card that’s linked to your savings account and can be used like a credit card, but only accesses funds you have in your account.
Starting a super fund
When you’re young, retirement seems far away – but this is the best time to start socking money away into a superannuation fund. Adding an extra $10-20 a week into your super from a young age can make a huge difference to how much you’ll have when you reach retirement, thanks to the magic of compound interest. To make it easy, contribute a portion of your salary or wages into super (known as salary sacrificing). You’ll pay just 15 percent tax on those contributions and reduce your taxable income at the same time.
Keep a spending journal
If you’re the type of person who buys things on the spur of the moment, or racks up purchases online when you’re bored, keeping a spending journal can help retrain this impulse. Every time you want to buy something, ask yourself if you really need it – or see if it’s something you can pick up for a few bucks (or for free) on buy’n’sell platforms such as Facebook marketplace. Forcing yourself to wait for a 2-3 day cooling off period every time you want to buy something helps too; you may find you don’t want or need it.
Figuring out your finances (rather than flying by the seat of your pants) can be punishing when you begin, but far less stressful in the long run.
Don’t forget, if you need help managing debt, you can contact the National Debt Helpline or get free legal advice from a range of independent, not-for-profit, community legal centres.
You can also seek out free financial advice before you apply for loans or make big financial decisions to ensure you’re doing the right thing for your personal circumstances.
This information is general in nature and has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness of the information to your own circumstances and, if necessary, seek appropriate professional advice.