7 winning money tips for fresh graduates

MANILA, Philippines – Life after college is not all fun and games. After the cheesy graduation speeches, the exciting after-parties and the liberating thoughts of your new-found freedom, your overwhelming financial obligations bring you back to the real world.

Since you're already supposed to make a living for yourself, you can expect a whole lot of responsibility, a new meaning of the value of money, and a whole round of headaches to come your way. After all, there's no kind professor to help you pass your subject, right?

You're completely on your own!

Don't fret, though. The good news is that you're not alone.

Here are a few winning tips to get you going:

1. Understand what money specifically means to you

Unless you realize what the value of money is to you in the first place, you can never be committed to managing it correctly.

Does money mean extravagant parties, expensive gadgets and branded beverages to you? You might want to spend more time in revising your view. Since these things are highly disposable and depreciate quickly, your money can become easily disposable, too.

2. Get two kinds of income: active income and passive income

For active income, the efforts you put in here will be rewarded over the short-term. Think of it as making money after selling your chicken’s eggs – instant profit but of lower value.

For your job: Consistently connect with the authorities in your chosen job industry. Attend seminars and conferences related to your field of work. Prioritize one project at a time and produce productivity reports to be presented to your supervisor. Aim to get that promotion.

You’re not competing with other people – you’re competing with yourself.

For passive income, the efforts you put in here will be rewarded over the long-term. Think of it as making money after selling another chicken – delayed profit but significant value.

Try an online business selling mugs or t-shirts. You’ll be designing, producing and marketing like crazy at first, but when traction comes in, all you need to do is deliver orders.

How about renting a room in your house? You’d need to properly filter the applicants, conduct extensive background checks and install CCTV cameras upfront, but in the long-term, you only need to collect the cash and do regular maintenance.

Don’t just rely on one income source. If you get fired, you’ll have nothing left to do but cry yourself to sleep!

3. Identify your three financial goals: one short-term, one medium-term, and one long-term

You can’t achieve something that you can’t even quantify in the first place. List your 3 financial goals according to their time frames.

Short-term can be as short as one to five years such as your down payment for a car. Medium-term can last for 6-9 years such as your downpayment for a house or a condo unit.  And long-term financial goals can be beyond 10 years, such as your personal retirement fund or your child’s college fund.

4. Figure out your cash inflow and cash outflow

Make a budget. Seriously. A budget is like a regular reality check that you need once in a while. It makes you think clearly and points you to the right direction.

Personally, I was about to book a last-minute trip to Japan because I’m obsessed about Asian pop groups. When I took a look at my budget, it reminded me that I was supposed to use the money for a financial certification program instead.

5. Automate your savings

Sometimes, you may feel like it hurts when you’re supposed to manually save money. This is where automation comes in.

Once you’ve enrolled automatic fund transfers, you would feel that it’s easier to just let it continue instead of going through the hassle of un-enrolling the process altogether. First things first, automate your savings for your emergency fund. (READ: 12 tricks to save money)

6. Purchase only your priority within your financial capacity

Avoid using credit cards to buy anything. Yes, there's also an upside to using them, but unless you're hard-core disciplined about your spending, it's better for you to steer away from the temptation.

A credit card swipe may be a burden to your life. Credit card debt is serious – you can drown in it, if you're not controlled enough. (READ: 10 things to know to build your rainy day fund)

Handing over your card to a cashier can make you feel good. But, can that feeling help you pay for your debts?

For purchases, it's still better to use cash as it helps you limit your spending. If you can't pay for it in cash, you can't afford it. If convenience is the issue, you can take a look at prepaid cards instead.

7. Fill out that investment form and submit it now

You’re not getting any younger. If you don’t start now that you still have fewer financial obligations, when will you start?

Will you start when you already have a partner, kids, a mortgage, a car loan all at the same time? It’s highly unlikely that you will.

Listen, if you’re still confused about investing, that’s normal, because there are a lot of investment types and investment options.

But, don’t let this confusion bog you down. You can always ask financial experts for advice – usually, they don’t even charge on the initial consultation. (Just make sure to clear this out first.)

You can also ask insurance and investment companies to assist you. Listen to financial authorities, but decide on your own. At the end of the day, the doctor may be the expert at medicine, but you’re the expert at your body.

In the end, though, it’s your decision to take an action that counts.  – Rappler.com 

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