So you have finished school and gotten yourself a good job, what next? You hope to buy your first car and work your way up to a house. Meet a nice person, settle down and begin building a family of your own. Work hard, go up the ranks and eventually retire to a calm happy life with lots of money to travel around and do those things you couldn’t do while you were still working.

Some people are lucky enough to actually have their life plans pan out, but for many, the task is more daunting than anticipated. However, for everyone, the earlier you learn and apply personal finance management, the greater your chances of making the dream come true. Every person’s financial life is unique, because you don’t earn the same; you have differing obligations and are accustomed to varied standards of living.

The three tips given below can, however, be applied across the board for first-time income earners. Read on to learn more:


  1. Map out your financial plans

As early as possible, create your list of both short-term and long-term financial goals. Be realistic, but also don’t shoot too low. That way, you can gain a sense of achievement when you realize them one after another, giving you the drive to work harder towards achieving the remaining goals.

If you tried setting goals and they didn’t work before, don’t give up yet. The key is not in the goal-setting per se, but rather in the discipline to apply yourself towards the achievement of those goals.

For every long-term goal, draw a time-plan so that you can revisit it from time to time to ensure you are still on track. For example, if you want to get your own home by the time you hit 34 and you’re 24 now, determine how much you need to save up every year in order to make enough for the down payment.

Divide it further into monthly savings and then work to ensure you never go below your target every month. In addition, ensure you stay on top of your other financial obligations so that your credit score remains above average in order to qualify for the best mortgage plan.

You can also have your short-term goals mapped the same way. Examples of short-term goals include taking vacations with family and/or friends at the end of the year, buying an appliance/electronic gadget you’ve been eyeing among others. Determine how much you’ll need and draw out a plan to achieve that goal in the time allocated.

Having goals and time plans will help you maintain the discipline to achieve those goals. So as not to fall on the wayside, dedicate a small amount each month as ‘Entertainment’. When you have a small amount to do with as you please each month, you won’t feel like you’re working to place all your money in some future plan and missing out on all the fun now.


  1. Budget your monthly expenditure

Many young graduates just starting out in careers make the mistake of spending every dollar they earn. However, whether or not you have an end-game in mind, saving must become part of your monthly expenditure. It’s not as difficult to save as you think, especially once you get into the culture.

For instance, you can forego that premium coffee you like for a cheaper option and save the difference. Even better than living within your income, try to live below your income as much as can be allowed.

To begin with, make a list of all your monthly expenses versus incomes. When you see where all your money is coming from and where it’s going, you will nurture the discipline to control how you spend it. Ensure all your obligations are met first – utility bills, credit card debts, loans, rent etc. Then set aside money for your needs – transport, food, airtime for your phone etc.

After that, determine what percentage goes into your savings account for the emergency fund and what you will direct towards your goals from above. If you have little to spare, try to see where you can trim your budget e.g. taking the bus to work instead of driving, getting a more affordable apartment according to your income etc.

Hold off on the wants until your needs, obligations and savings are taken care of. Be consistent with your savings, and pretty soon you’ll start striking off things from your financial plan as you achieve them.


  1. Have a savings and emergency fund

Having the discipline to save from the time you begin earning will help you keep the discipline even later in life when you have more obligations. Apart from saving for financial goals, you need to start an emergency fund and contribute to it each month. Most people recommend setting aside 20% of your income each month towards saving.

If you do so consistently for six months, you’ll have built an emergency fund, and then you can contribute a smaller amount, say 5% and redirect the difference towards your other financial goals. Don’t spend your emergency fund for anything other than a real emergency e.g. if you get laid off or quit, or have a medical emergency.