Whenever you decide that this time will be the start of your career, whether it’s a decision to take work more seriously or you’re graduating from education. Having a financial base prepared for when you’re undertaking a career and having to meet financial obligations, such as a mortgage, rent or other additional costs.
If you’re able to create a good plan and realistic financial habits, then these will help to build a strong set of practices that will provide lifelong benefits.
Unfortunately, there’s not a specific set of rules which ensure a suitable financial base for the start of your career as everyone has different circumstances and restraints. However, the key to a solid financial base is to develop habits which enhance your money management.
Set a budget
Being aware of your financial baseline is important so that you’re aware of a budget which is achievable. This will also help you know how much extra money you have to save for the big purchases. Setting a budget will also strengthen your ability to prioritise financial options and desires, especially when it comes to bills which need immediate actions and others which can be delayed.
To set a budget
, start by listing your primary needs and then compare the results against your monthly income. This will provide you with a clear view of what you need to earn to sustain those basics or what you have remaining following your baseline financial commitments have been fulfilled. It might also show where you’ll be able to cut costs and provide the ability to have more disposable money.
Prepare for retirement
Being prepared for retirement when you will be without a solid income can become very important. You might have to be completing this on your own if you’ve decided to opt-out of the workplace pension scheme or want to save above there current contributions.
Building a habit of contributing a small amount each month for your retirement can reap large benefits once you retire. Following from your baseline, devise a realistic amount that you can put into a savings account to build until your retirement.
Be responsible for your financial documents
If required at any point by a lender or an employer, then having access to your financial documents will cause significantly less disruption than if you are required to obtain financial documents from a third party or proceed without the financial documents.
Have a good credit score
All our financial history and past experience will influence our credit score rating which has a direct effect when you’re looking for mortgages or a loan. Most financial institutions will take into account your credit score and commonly younger individuals will have a poor credit score because they haven’t proved their ability to make repayments on a loan.
Alternatively, if you’ve previously borrowed from a lender, then making sure that all the payments are up-to-date and if possible, pay several of the outstanding balances. You’ll need to justify your ability to make repayments as there aren’t any payment protection
schemes which can be a fall-back if you fail to maintain your finances.
Dependent on your circumstances, purchasing insurance might seem like a waste of money but in a situation when you need financial support. They could be a life-saver for your savings. Encouraged insurances are life insurance if you have large financial obligations or dependents which would be in a difficult situation if you suddenly passed away to home insurance for when a problem happens to the home and you’re left with a large bill.
Always aiming to save money will provide the best preparation for the future. If you’re able to make monthly contributions to your savings, then you’ll have the confidence that when an unexpected problem arises, that you’ll have a financial safety net. If you’re able to budget your lifestyle whilst saving money, then you’ll be in a good financial position come retirement
Alternatively, you could take advantage of any unexpected money to be put into your savings to be enjoyed at a later date. This could be an annual bonus, win-fall or an inheritance, regardless of where the money has come from, you’ll be more prepared for the future.
Starting a career can be difficult as it’s generally associated with new responsibility or a different company, meaning you’ll want to prove yourself at work and your financial sense might be less important. However, correct preparation can provide the reassurance and targets that mean you will also be financially secure.