Financial Planning For New And Upcoming Graduates

When you leave university, the world can seem a daunting place. You’ll no longer be able to rely on student loans and finding a suitable job can be a harder task than expected.

Life after university isn’t all rosy in the early days and you may experience anxieties over how you’ll pay your own way without a helping hand. All students encounter these dreads, but it’s always best to plan your finances in advance before you enter the big wide world as a graduate.

Here are a few financial tips for the upcoming or new graduate.

1.  Save for your future

During the last few months before leaving university, it may be beneficial  to start saving up for graduate life. Learning how to budget for your car, rent, mobile phone and other bills while still having money left over is a great life lesson.

Having a part-time job or a generous student loan will make budgeting far easier, but you should always aim to save a bit of cash aside per week, regardless of whether it’s £5 or £50. Personal finance experts recommend saving approximately 10-15% of your weekly budget if this is a manageable amount for you.

Before you can budget wisely, determine how much cash you’ll need after finishing university – for example your roughly estimated living expenses or the costs of going travelling, if that’s a plan you have in mind.

2. Open a graduate bank account

Opening a graduate bank account would be an ideal start to get you on the right tracks financially after graduating. Most graduate bank accounts offer a 0% overdraft as well as added freebies. You can apply for a graduate account up to three years after graduating. Always aim to go for the bank with the longest 0% overdraft, especially if university has left you broke.

On the other hand, don’t use an overdraft as an excuse to spend more money you don’t have. Graduate bank accounts give you the opportunity to pay back what you owe without the added sting of interest. If you go over your overdraft limit, you’ll be hit with a mountain of charges and other interest rates, so try not to go too wild.

3. Prioritise any debts

Although saving can be a boring and gruelling part of life, learning to pay off outstanding debts is an essential part of financial planning. Before choosing which debts to pay off first, look into those with the highest interest rates. The higher the rate, the more you’ll pay over a longer period. Such examples may include credit or debit card debts.

Don’t worry about your student finance loan at this stage. You need to earn above £21,000 to be eligible to start paying any of it back. Your loan will be automatically deducted from your wages by monthly, so this isn’t a debt you need to worry about.

4. Consider emergencies

Many graduates get themselves into a financial strain when emergency funds have been neglected. Such funds which have been accounted for may cover car repairs, lost or stolen phones or medical bills. You never know when things may crop up, so always be prepared for the worst – depressing, but a sensible tactic.

If you have enough cash, you could set up an automatic direct debit from your current account to a savings account so you never forget to budget for emergencies. This simple strategy should save you a great deal of unnecessary worry and stress of having to come up with large sums of cash on the spot.

Inspiring Interns is a graduate recruitment agency which specialises in sourcing candidates for internships and giving out graduate careers advice. To hire graduates or browse graduate jobs, visit their website.