As a new graduate organizing your priorities is an important part to controlling your spending, overcoming unexpected financial changes, and achieving financial goals.
Budget priorities for a new graduate include:
- Identifying your “needs” and your “wants.” Limit spending on “wants.”
- Building an emergency fund for unexpected expenses.
- Paying off your student loans.
- Building a great credit rating by paying all of your bills on time.
- Start saving! Look into RSPs, TFSAs or your employer’s pension plan.
Tip: You can get an estimate of your anticipated position earnings by using the Wage Search tool from the Canadian Job Bank.
Consider the 50/20/30 Rule
If you don’t want to track of all your expenses precisely, keep the 50/20/30 rule in mind to budgeting.
- Essential Costs (50%): These are the “needs” you outlined earlier. Some examples include shelter, food, and transportation.
- Financial Priorities (30%): This will go towards debt repayment, savings and emergency funds.
- Lifestyle Priorities (20%): These are the “wants” you outlined earlier. They reflect what is important to you such as entertainment, hobbies, and fitness.