It’s November, which means it’s that time of year when young tertiary students start thinking about their imminent release into the real world, joining the workforce and becoming productive members of society. But it is key to remember that the money moves made henceforth will set the tone for the financial behaviour, which may have started with the use of student loans that now become due. How you handle money now will follow you for years to come. Whatever financial family background you come from it’s important to handle money responsibly. But this can be daunting for the young graduate entering the workforce full-time for the first time. Being anxious about it is natural. Trust me, adulthood is no joke! But with proper planning you will be able to navigate financial management.

With the correct tools, confusion about money can be eliminated. Here are some basic money moves I would suggest the young graduate make within a year of joining the workforce:

1. Create a budget and review it regularly. This is the lynchpin for responsible ‘adulting’. The nostalgia of my first pay cheque, I remember it well. “I’m rich! It’s like the money is burning the proverbial hole in your pocket. It’s shopping time! Don’t do it! Create a budget, it will help you to live within your means. After taxes are taken out of your pay cheque (this still hurts, I cannot promise you any reprieve in the future), what you are left with — your net income — must be divvied up in a way that allows you to live as an adult without having to constantly hit your parents up for additional funds or worse, sink yourself into debt.

2. Perhaps, when you lived at home, you received an allowance, which was yours to do whatever you pretty much wanted. Living on your own now means there are bills to pay and expenses to take care of each month; your finances are no longer completely disposable. Even if you’ve opted to remain at home for a while, be wise with your spending. Avoid debt as much as possible. Create a rainy day fund, which can be used for the security deposit you’ll need when you finally move into your own space.

There are three broad categories for budget creation. First, begin by noting what your fixed expenses are; that is to say, your regular monthly bills — for example, rent, utilities, etc. These are necessities that must be paid. Next, list your variable expenses, the ones that change from month to month, like groceries and entertainment (going to the movies or meeting up with friends). These fall under the category of wants and are therefore not urgent, so you can vary them from month to month. Then finally, make note of what you want to allocate for savings and/or paying down debt, such as your student loans. Most importantly, start investing! I cannot stress this enough, that 9-5 you have reaping your newfound liquidity is not the pathway to wealth. Designate a percentage of your income monthly to investments, which is totally separate from your savings.

3. Identify realistic financial goals. A financial goal is simply a plan you have for your money. Young people tend, oftentimes, to have a YOLO outlook on life — you only live once — and while this is true, you should never sacrifice practicality. You are here to make the most of life while you can, and, yes, it’s a challenging time to be a young person in the world right now. But every generation came of age with various challenges they had to overcome and futures that seemed unsure. Still, you have to live in hope and one of the ways to do this is to plan for the future, for which you will need money.

There are long-, medium- and short-term goals. A short-term goal can be achieved soon, in roughly a few months to a year, like purchasing a car. A medium or mid-term goal takes a little longer, like paying off student loan debt or doing further studies. A long-term goal is saving for events much farther down the road, like retirement or paying off mortgage. While you can make a note of what these goals would look like for your life, for the time being, start with a short-term plan, so as not to become overwhelmed. It can be something as simple as beginning an emergency savings fund with, say, three months’ worth of living expenses in the event the unforeseen happens. Remember, everyone’s goals are different; you must determine what yours are. Once you have amassed three months’ saving start investing for the medium to long term. Life seems long and full of possibilities now but it passes quickly, so retirement planning at an earlier age is prudent. Does your employer have a pension plan? Do they match your pension contribution? If no pension plan, then speak to an advisor at say NCBIA or Guardian to discuss starting your own in lieu of, or as a supplement to, your company’s pension plan.

4. Start practising good financial behaviour. Little things help to determine how the world sees you and how you advance in it.

a) Were you a party girl in college? What is the image of you that prospective employers see online? If it isn’t one you’re necessarily proud of, clean up your social media profiles. Create a LinkedIn account. Don’t blight your career prospects because people don’t see you as a serious person. This is not to say that you shouldn’t show your fun side but be mindful of what you put out in the public arena.

b) Pay your bills on time. Believe it or not, this is something that is taken into account when credit bureaus assign credit ratings later when you’re thinking about things like mortgage loans, and so forth.

c) Learn to cook if you don’t know how. Fast food and dining out are famous for eating away at money you could be saving to reach your financial goals. It’s also never too early to get a handle on your health. You know what they say about an ounce of prevention today. This one is so unassuming, it is the leaky faucet that will hit you with an enormous bill later; whether it be a health crisis or the constant drip of deductions from your account.

d) Start learning the basics of investing. Even if you may not have the money now to go full-throttle, be aware that you don’t just live for today. The earlier you start taking baby steps towards investing, the greater your chances of building wealth farther down the road. If you are timid, dip your toe into the investing waters via a managed fund like unit trusts.

“Knowledge is power: you hear it all the time but knowledge is not power. It’s only potential power. It only becomes power when we apply it and use it. Somebody who reads a book and doesn’t apply it, they’re at an advantage over someone who’s illiterate. None of it works unless you work. We have to do our part. If knowing is half the battle, action is the second half of the battle.” — Jim Kwik