What Would I Tell My Old Self About Money Management?

My younger self as a teenager had always imagined earning money to be fun. However, as the years passed by, I wish time would slow down because I don’t think I’m ready for bigger commitments. It feels surreal to think how far I’ve come in my academic journeys. The thought of entering the job market itself is nerve-racking enough for me. What more having a decent job and waking up to go to work everyday. Plus, the future also seems scary because getting a job in the post-COVID-19 marketplace would be tough, no doubt.

Fresh graduates should first create a budget of their monthly income to keep track on their money transaction.
One of the first things that fresh graduates have to do once they enter the workplace is to devise a money management strategy. But do they realise the need for it?
Image by Vasily Koloda from Unsplash

If Only Money Management Was Taught In School

Generally, the problem with fresh graduates is not about spending lavishly. But the truth is most of them simply lack the knowledge in personal financial planning. All they need is guidance on how to manage their money after graduating. According to the Malaysian Financial Planning Council (MFPC), 11 Malaysians are bankrupted each day in 2016 due to poor financial management. The high number of bankruptcy cases could stifle the country’s economy as people are becoming more callous about borrowing and spending. This clearly stresses the importance of teaching financial literacy as I have written in the previous article.

Learning never stops because getting your money in the right place early can make a huge difference.
Young adults have little experience in managing money hence they should continue to learn even if they have graduated.
Image by Scott Graham from Unsplash

Let’s be realistic, how many young adults actually save at least 10% of their salary? True, different people have different responsibilities and liabilities, but that doesn’t mean that they shouldn’t set aside some money for a rainy day. We should always start saving our emergency funds within our first year of employment. This will not only give us a head start but also as a way for us to avoid going into debt. Effective financial planning will reduce the risks of overspending and the inability to pay off debt. Therefore, excellent skills in managing money will play a vital role among fresh graduates. Particularly during these uncertain times where most of the companies have stopped hiring, and some have even started laying off employees too.

Lavish Lifestyle Kills Your Money In Silence

We can’t deny that social media has its perks by keeping us updated with the latest lifestyle trends, including food, fashion, or high-tech toys. But too much time spent on it would eventually lead to impulse buying. And this is accentuated by a sense of urgency. From a psychological perspective, this common behaviour leads to anxiety and unhappiness, thus has to be controlled. For instance, people these days especially fresh graduates get unrealistic when spending because they don’t live within their means. They need to learn how to differentiate between needs and wants, or they’ll end up wasting money to buy unnecessary things.

We tend to splurge on things that we truly enjoy and scrimp or nix things that we have no use for
Fresh graduates are often tempted to spend large amount of their salary on things they don’t need i.e. latest gadgets, fashion, travels, etc.
Image by Andrea Piacquadio from Pexels

The bitter truth is that we are living in an era where everyone wants to keep up with the Joneses. This unhealthy mentality increases the desire for wealth and branded goods such as splurging on expensive outfits. Spending extra money for the sake of wanting to look trendy isn’t worthwhile, really. For someone who has just started working, having a budget plan such as buying affordable and comfortable work outfits is more important. Social media is amazing but we should never let it determine our lives instead of living the life we want.

Flashing Credit Cards To Pay For Something Is Nice… But Always Exercise Wisdom

Track your credit card spending is one of the money management skills that fresh graduates should have.
Credit cards have become an essential part of our lives because of the convenience they offer. Fresh graduates should take advantage of them but must exercise wisdom to spend within their means.
Image by Rawpixel.com from Freepik

“You should never use credit cards because they are dangerous,” might be the most often heard advice during financial talks. There are indeed pros and cons to credit cards. But alas, not many people encourage millennials to take full advantage of them. Perhaps we have been living in a stereotypical world for far too long that whenever we hear of credit cards, the first thing that comes to mind is debt.

A credit card can be a friend or a foe to our finances since it’s just another method of payment. Technically speaking, it’s harmless. However, if our money management skills are poor and we are unable to pay outstanding dues on time, then we should avoid using credit cards at all costs. This is because having credit cards will influence one’s lifestyle according to a research done by Drazan Prelec and Duncan Simester. Credit cardholders tend to spend and consume more than necessary. Reward points, cash backs, and discounts are some of the enticement to lure cardholders to spend even more.

“Don’t save what is left after spending; spend what is left after saving.”

Warren buffet, CEO of Berkshire Hathaway

Be Bold To Ask For Help For Your Personal Financial Planning

We often hear having money alone isn’t everything, as it can never buy you happiness. But everything costs money nowadays, isn’t it? The uncertain economy not only has affected businesses but also hurt fresh graduates’ job prospects too. To think that job opportunities have always remained competitive even before the pandemic makes me anxious.

Experiencing financial difficulties after graduating was one of life’s greatest lessons for Firdaus Izam. Learning that living with a three-digit salary in Malaysia is hard, he then resolved to learn more about financial planning. This led him to the insurance industry. Fresh from facing his setbacks due to his own lack of financial literacy in his early 20’s, he looks forward to assisting fresh graduates so that they won’t suffer like how he did back then.

Firdaus Izam wishes to help others in managing and planning their money for a peace of mind.
Learning first hand just how important money management is has inspired Firdaus to offer his help to people who are now only starting off where he was before.

Money Management Skills Will Never Be Irrelevant

Life isn’t about racing to reach a destination. Instead it’s a learning process for personal development. This includes having a clear vision of our career path and goals. It’s not unusual that 98% of employees choose to change jobs every five years. The reasons may vary as it could be due to a higher salary, toxic work environment, and inadequate benefits.

Passion and perseverance landed Firdaus into the financial industry. His interest in wanting to help others to manage their own finances convinced him that he’s in the right field. Fret not to those who are graduating soon. If you have yet to plan your finance, Firdaus is more than willing to offer a free consultation for you.

For more information regarding insurance, do head over to his Linkedin or Facebook. Firdaus Izam will be more than happy to take your call at +6016 516 5660.

A crisis can be an opportunity or a threat, the same goes for the stock market. Ever since the pandemic, the healthcare industry has benefited the most as the share price soars higher than usual. Therefore, we shall explore the basic knowledge we should have before investing in the next episode.

Have you done any financial planning?
Sarah ZAINAL

About Sarah ZAINAL

Finance major, with a secret love for linguistics, Sarah grew up reading, writing, storytelling, and even dabbling in poetry too. A hardworking lass who loves to learn new things to soak up new experiences.

3 Replies to “What Would I Tell My Old Self About Money Management?”

  1. Pingback: Is Stock Market The Quickest Way To Become Rich? - Espoletta

  2. Thank you so much Sarah. Couldn’t have said better. I wish to share more when I’m officially a full fleshed Financial Planner. I hope many more would realize it’s never too late to start planning to reach the desired goals especially to those who’re still young.

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