Fresh graduates and young adults in Sri Lanka often find it jarring to transition from spending their days at the school to entering the professional world. This time, they need to work, live on their own, and strive to be self-sufficient.
To ensure that you can kick off this new chapter of your life on the right foot, there are several important things you can do to manage your personal finances better.
It actually takes time to create a realistic budget. Since your needs and spending patterns will change, you should start tracking your spending to know where your money goes. This is also the time to plan for expenses you probably didn’t plan for in the past, such as groceries, insurance, rent, and savings. It matters a lot to be organized when it comes to your finances.
It is also crucial to set money aside for emergencies and actual expenses so you don’t end up in debt. If something happens, you must have some cash handy so you can pay for it with no need to use your credit card or apply for a loan.
Young adults and fresh graduates actually have an edge over their older counterparts. Time is still on their side, letting them take advantage of the magic of compound interest. Investing in yourself and growing your knowledge can equip you better to make sound decisions that can benefit you down the road.
It is also important to set aside funds in your budget for paying off any existing debts. For example, if you have student loans, paying them back will start around 6 months after finishing your studies. You might also have existing credit card debts you have to pay off, as well as student lines of credit and similar borrowed education funds.
A lot of young adults seem to accept that debt is a normal part and way of life. However, it doesn’t have to be. Be sure to look for ways and means to have your debt paid off so it wouldn’t hamper your opportunities and choices in the future.
There are many fresh graduates who often make the costly mistake of getting a new car and other similar large expenses the moment they land their first job. What they don’t realize is that these large purchases are not just about being able to afford monthly payments. This is also about being able to afford paying off debts.
Make sure you learn living within your means. Pay off existing debts, and understand and relish the true value of delayed gratification. It will be cheaper if you save up to buy something in cash than buying it on credit.
Skills, proper information, and education are the secrets to successful management of your personal finances. As times become more challenging for fresh graduates and young adults in Sri Lanka, you should learn how to make sound and wise decisions to prepare yourself for financial success in the near future!