5 Financial Habits New Grads should adopt

*This is not a financial news/learning tool. This is mainly informative*

Found this article that is extremely useful and relatable. Technically the below mentioned habits are not restricted to just newly grads only.

1.Reset Lifestyle Expectations.

Chances are, lifestyle that we expect is much more expensive than we realized and it may not be achievable at our current salary.

As such, need to adjust lifestyle, reduce spending. Since we’ll now be responsible for stuffs that we are not responsible for in the past such as insurance, car payments (liability) and housing (asset).

2. Establish a positive cash flow

In a nutshell, spend less than you make. General rule of thumb is that debt should be less than 36% of gross income (total income before tax). Housing should be no more than 28% of gross income.

3. Establish Emergency Fund

Make a goal to contribute a set amount to an emergency fund. Goal is to build an emergency fund that will cover three to six months of your living expenses. In SG, basically this is about your monthly salary x6, saved for rainy days.

4. Understand and Maximize Employer’s Benefits.

This goes without saying I guess. Try to max out any benefits you are entitled to.

5. Pay yourself first.

I.e. establish automatic transfers into your emergency fund/savings account or other goals, to ensure the money wont go elsewhere.

All credits (and more readings) goes to: https://www.investopedia.com/advisor-network/articles/5-financial-habits-new-grads-should-adopt/

 

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