Congratulations! You’ve graduated with flying colors. After what feels like a quarter of life that only went in crunching exams and assignments. You cannot wait to walk the runway of your new job or start-up. It may seem like a glamorous world, filled with money making pathways, freedom from set rules and your chance to shine bright. And it rightly is. Provided you walk the right path and most importantly keep your finances in check. 

You may think, I’ve done that, how difficult can it be? A few more responsibilities can’t be that painstaking. If attending boring lectures in college was hard, working long hours and attending meetings in a room full of people – smarter, older and experienced than you is an adventure of its own. If that’s not all, you cannot ignore the bills that come for you repeatedly. Over time they only mount and will constantly remind you, of your unpaid expenses. 

To help you navigate the adulting world, here are effective ways to budget, which you should follow. 

 1. Keep your pre-tax income in check

Make sure you’ve analyzed your pre-tax and post-tax income. How much income are you getting in hand after-tax deduction, payment of loans (if any)? You can budget your expenses, savings and any other monetary requirements once you have this information in place. 

 2. Spread out your expenses 

The one thing you want to ensure right from the start of your journey is financial freedom. With a moderate income and at the beginning of your career, it may not be possible right away. Make sure you eye that as a goal. This will ensure you eventually break the chain of living paycheck to paycheck. You may also want to understand, on what date, day and time your bills come in. To avoid a penalty, late fee payments and ensure sufficient cash backup, keep a calendar of your bill dates.

 3. Do you need that?

Before you buy, ask yourself. Do you need that? Should you buy it? It may be tempting but always keep a track of your goals, budget and spend accordingly. Necessary things are not just bills and everyday expenses. It should also include health insurance, rent if you are living on your own and saving for long term goals.

 4. Review your expenses 

Budgeting is one thing, planning your expenses another and reviewing them from time to time is a crucial step too. Have your expenses unexpectedly risen? Do you need to make sure you’ve more cash reserve for the upcoming festive month? The budget should account predictable, unpredictable, emergency and heavy expense months. There are times when your income may not see a rise, but your expenses will. You need to budget all types of possibilities to avoid a financial debt burden.

 5. Are you saving enough?

An important step in budgeting is saving. You need to keep aside a portion of your income for contingencies. Ensure you are budgeting a comprehensive savings plan to meet your wants, needs and money milestones. At least 20% – 30% of your monthly income should be directed towards savings. More is better, but it should not be less. As the years’ pass, your responsibilities will also increase. You will need to balance the savings % proportionately to ensure a debt-free life. It may seem daunting. But remember, the harder the challenge, the higher the reward. 

 6. Document your goals and dreams

Dream home, luxury car, sabbatical year, or a higher degree abroad. Envision any goal you may have and ensure you budget these goals in a (smart) specific, measurable, achievable, relevant and time-bound format. Breaking out from the humdrum of life will be easy if you’ve budgeted and saved enough to fulfill your goals.