Graduates are no strangers to money problems. Most times, it’s unavoidable. Between paying off your student loans, finding a job and being independent, money becomes a scarce commodity. Not to mention, most universities don’t offer financial literacy training. So, graduates leave school with little to no knowledge of how to generate and manage income. Here are some money mistakes most graduates make.
1. Spend Too Much On Rent
We all want to live in the leafy suburbs and have palatial homes. However, as recent graduates, it’s not as easy as it seems regardless of your salary. You already have a lot of financial commitment and adding a hefty rent is unnecessary. In fact, if you’re comfortable living at home, do so until you’re able to stand on your own two feet when you move out. There’s nothing worse than moving out and then three months later you’re back home because of financial constraints. Alternatively, you can look for a roommate to split the rent. Check out A Beginner’s Guide To Living With Roommates
2. Don’t Track Your Money
How many times do you check your M-Pesa or bank statements? If it’s rarely, then you’re making a big money mistake. Tracking your money as a graduate will help you identify unnecessary spending and manage your accounts better. Pay attention to your net worth after you’ve subtracted your liabilities. If it increases over time, then you’re doing a good job in your financial affairs. However, if it’s steady or decreasing, you need a few money management tips. Check out 5 Financial Apps You Should Have
3. Not Having Health Insurance
Catering for your medical bills can be strenuous, especially for recent graduates. To most people, insurance sounds like a luxury but it’s in fact, a necessity. Health insurance is the most important thing to have since you never know what might happen. In many cases, graduates are taken off their parent’s insurance plans as they are considered independent adults. That means it’s up to you to look for a health insurance plan. You can start with the basic NHIF cover. However, you should look into getting a better cover.
4. Wait To Start Saving And Investing
There’s no timeline on saving and investing – Investing: why you should start in your 20s. Therefore, the earlier you start the better. Saving gives you discipline on how you spend your money while investing improves your income-generating skills. Most graduates struggle in both departments. Therefore, it’s advisable to start as soon as you can so as to get better with time. Besides, when you’re young you have plenty of time to put your money to work. Here are Essential Retirement Moves To Make In Your 20’s And 30’s
5. Overspend When You’re Paid
You can avoid the excitement of getting paid especially for recent graduates. Additionally, there’s nothing wrong with buying that pair of shoes you liked or spoiling yourself. However, the excitement might make you go overboard and spend every penny leaving you broke throughout the month. Avoid temptations like online shopping or night outs. Additionally, you can separate your finances immediately after your account gets credited. Finances: 8 Reasons Why You Need To Do A Lifestyle Audit On Yourself
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