Our resident finance enthusiast, Wale will be sharing his ‘Monday Money nuggets‘ through the month of June.
Hope everyone is excited to learn from Wale’s experiences and insight.
This is not financial advice but simply someone sharing their experience and perspectives on money matters.
So, you are done with school and now in the Job environment making some cool or hot cash. It’s time to spend the money you have worked hard in school for, right?
Within a few months, you are about to realize the responsibilities of Adulthood – shey they told you to be responsible since, you refused😋.
A quick rude shock, especially if your parents decide that it’s time to be independent once you start working, is the expenses you will bear on your own. Before now, you were spending like Hushpuppi, now it’s time to get real.
Canadian graduates typically will have the opportunity to earn a salary relatively decent for a young single professional. How and what you decide to do going forward will determine how fast money works for you.
Now, one question I always had was, as a young professional, how much is enough to save. This really depends on your goal. Is a $200 savings out of a $4000 monthly check enough? Maybe/Maybe Not?
One thing I’m sure of is building wealth and financial freedom aren’t an accident. It requires Delayed Gratification – a word that appears to have disappeared from the woke young generation.
As I entered into the professional space earning a decent average figure, I had ONE plan. Like they say, if you fail to plan, then you are planning to fail.
Save at least half of every month’s check.
Your eyes are probably rolling seeing this statement, but I’ll show you how super possible this is. It all comes down to your goals for money. For me, I got to understand the power of real estate as an investment and how that can help fuel financial freedom.
If you want to save half of your monthly check, a simple step to follow is:
a. Track your expenses
– Write out everything you spend on in a month, I mean EVERYTHING.
b. Budget your expenses.
– Find a way to merge all of your expenses into one paycheck. Most of the time, you get paid bi-weekly or bi-monthly in Canada. I like to use the bi-weekly check as my expense limit though, because it gives you 2 additional paycheck savings in the year, if you follow the strategy.
c. Do a weekly/bi-weekly review of your bank account and credit cards
– Sometimes certain charges or deductions are applied without you knowing, and getting on it fast can save you some money.
– With the popular use of credit cards, you’re liable to spend more than you have budgeted, so constant checks to see your balance during the month allows you to stay on course.
Why was I doing this?
1. Save and Invest Money for Wedding Expenses.
I like to believe that the majority of people would like to get married someday. For me, I had planned to work for about 2-3 years before getting married. As a result, I wasn’t going to wait until the date of the wedding had been set before I started saving.
Having a rough idea of the amount I would need for a wedding, I saved a large sum of money over some months and invested it until it was time for the wedding. Talk about free money😉
2. Save up for Down Payment of a House
As a young professional, I wanted to buy a house as quickly as possible, so I ensured not to change my status even after graduating. I stayed back at a shared residence and kept the same car I had as a student. Doing this enables you to get maximum savings on your paycheck, and cut back expenses on rent which is the largest expense typically. Doing this for a year, I was able to save enough money to buy my first property.
Bonus Point – Invest your savings as much as you can in whatever works for you, however, make sure you invest in something you understand. Read about the investment, understand it to an extent, before putting your money in there.
In closing words, live below your means and save/invest the difference.
This post was originally written by Morenike Ajidagba and published on Musingswithmo.com. Feel free to send an email with questions or comments to firstname.lastname@example.org.