Financial Tips for Fresh Graduates

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Transitioning from life as a student to becoming a professional has its challenges, and one of those challenges is getting your personal finance in order. Earning your first pay check and starting to make money usually leads to a sudden increase in expenses; I know, because I’ve been there too.

Good financial management is crucial at this point in life. When you start organizing your personal finance the right way, you can start building your wealth early, and you will be able to achieve more things in the long run. That is why these financial tips are crucial.

Plan for the Future

The tempting thing to do is going from one pay check to the next and simply use all of the money you earn. However, you are taking on more risks when using this approach. For starters, it is more difficult to save when you already have it in your mind to spend all of your income. You also have less ability to deal with financial emergencies and changes in life.

What you want to do instead is start your journey to good financial management with a clear set of objectives in mind. Think about what you want to achieve financially in a year. Start working on longer-term objectives, including the level of financial success you want to reach in 10, 20, or even 30 years.

The objectives act as your guideline as you organize your personal finance. With clear objectives in mind, you can work out how much you need to save, the kind of investment instruments you need to use, how to best build your portfolio, and eventually reach the financial objectives you set for yourself. This is the best way to start organizing your financial future as a fresh graduate.

Save First

Saving isn’t something you want to do at the end of the month. In fact, saving whatever you have left after expenses doesn’t work 90% of the time. There is also the temptation of blowing through your income that we discussed earlier.

Instead of not being able to save, it is much easier to save a portion of your income early in the game. As soon as you receive your first salary, set aside 10% of it and put that portion in your savings account. Don’t worry about the actual amount; what’s important is that you start saving right away.

As you become more stable financially, try increasing the portion of your income you save in small increments. Continue until you can save 30% of your income without hurting the rest of your monthly budget. That’s a milestone to aim for; the sooner you can get there the better.

Start Budgeting Your Expenses

Having a clear budget is another thing you want to get used to from the start. Good financial management doesn’t mean you cannot spend your money on the things you like. In fact, organizing your personal finance properly gives you more opportunities to do that in the future.

For now, what you want to do is review your regular expenses and start making a budget for the following month. As you go through the process of identifying expenses, categorizing them, and figuring out how much you can afford to spend on each category, you’ll start finding new ways to optimize your personal finance too.

If you regularly spend £2 on coffee from that coffee shop near where you live, you are looking at £60 that you can potentially save every month. Dining out every night is a similar expense you can manage better as well. There are many of these expenses – small expenses that we make unconsciously – that actually amount to a big portion of your income. Set a budget and gain better control over them.

Have plans

The last piece of the puzzle is better planning. Having a monthly budget allows you to keep track of your expenses – and income – and stay within the limits of your financial capacity. However, there will still be times when a sudden expense or an emergency ruins your budget and throws you off your game.

To deal with this type of situations better, you need to have clear plans in mind. Do some research on how you can best fill gaps in your monthly budget. Take your time and learn more about financing options that you can lean on in such situations.

Even better, start allocating another portion of your income and build up an emergency fund alongside your savings. You can also turn to insurance to mitigate some of the financial risks you face every day by budgeting for insurance premiums.

Last but not least, develop good financial discipline. As long as you stick to the plan and use the tips we covered in this article to your advantage, getting your personal financial life organized from the very start will not be a difficult challenge to overcome.

Your First Mortgage: Important Tips to Know

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Buying your first property is both exciting and daunting at the same time. It is certainly exciting because you are hitting another milestone in your life. However, there are so many things to do before you can own the property, from choosing the right house to buy and getting the papers in order to securing the best mortgage loan to finance the purchase.

The latter is a big task on its own. You now have more mortgage loans to choose from, each with its own offers and advantages. You also have more lenders to work with now that the property market is booming again. Before jumping head first and applying for a loan, make sure you keep these important tips in mind.

Try Getting a Mortgage Loan Preapproved

Getting a mortgage loan preapproved – even before you start searching for properties to buy – is always the best way to go. There are plenty of benefits you can gain from having a mortgage loan preapproved by the lender of your choice.

For starters, you have more time to compare mortgage loans and negotiate better deals on them. You can also review deals from multiple lenders to find the most valuable one in the long run rather than comparing mortgage loans based on their short-term benefits and discounts.

Getting the mortgage loan preapproved lets you have a clear budget before you start looking into properties to buy. You can limit your search to houses that are within the preapproved mortgage principal range, making the entire search more effective.

One added benefit of getting preapproved is quick settlement. Since you don’t have to apply for a new mortgage once you find the right property to buy, you can offer quick settlement to the property owner and have better leverage when negotiating for the price of the property; that’s a big saving opportunity right there.

Check the Lender

Choosing a mortgage deal that benefits you the most is important, but you must not neglect reviewing the lenders behind the deals you are comparing. The mortgage lender you work with is just as crucial as the mortgage loan you use in some respects.

When working with a reputable mortgage lender with good history, you know that you are in safe hands. There are lenders who will work with their customers closely and working with this type of mortgage lenders means you will have the help you need should you run into issues repaying the loan.

You can also choose between large mortgage lenders – usually for their lower interest rate and better deals – and smaller lenders who treat you in a more personal way. Smaller mortgage lenders are now competing with the bigger financial institutions by offering personalized services; you have a lender that knows you by name and advises you every step of the way, making the whole process less daunting.

Get References

Don’t hesitate to ask for recommendations from friends and relatives as you compare mortgage deals. It is also a good idea to talk to those who are using the mortgage loans that you want to apply for, just to get a better first-hand view of what to expect when you do use the loan.

If you are working with a real estate agent, you can also ask the agent for some recommendations. Keep in mind that some real estate agents now partner with banks and lenders, so they might recommend mortgage loans from those lenders only.

The one thing you don’t want to do is going for the mortgage loan recommended by your real estate agent without looking into other deals available on the market. That brings us to our next tip, which is….

Always Compare Your Options

As mentioned earlier, you must always look into as many mortgage loan deals as possible before making up your mind and applying for one. There are quite a lot of deals and special offers too, and the best way to find a mortgage loan that benefits you the most is by comparing those deals.

Use the online search tools and quote aggregators available today to help you get quotes from multiple lenders. While searching for local mortgage loans, it is also highly recommended to contact the lender directly and ask for a better deal; don’t forget to mention that you are comparing options to get a better offer.

Comparing mortgage loans help you understand each deal better. Some loans are designed to benefit you early by offering discounts and fixed introductory interest rates. Others offer lower costs throughout the loan’s term, so you actually save more in the long run. Get into these details and you will find the best mortgage loan to take out in no time.

Yes, applying for your first mortgage loan is daunting, but that doesn’t mean you will run into issues while trying to buy your first house. Now that you have these tips in mind, you can easily spot the best mortgage loan to use for financing the purchase of your first property.