Finding Financial Balance: Practical Tips for New Graduates

Starting a career fresh out of college is exciting but also challenging. With a steady income comes increased responsibilities, and this transition often brings financial anxiety. Many new graduates try to save money by cutting down on meal expenses, declining social invitations, and hesitating to try new things due to concerns about extra costs. While their savings might grow, their quality of life may not.

Don’t Let Savings Numbers Control You – Learning to Spend Wisely is Also Growth!

Financial anxiety stems from various factors, but the core reason we desire more money is to feel secure and in control of our lives. Another reason for financial anxiety is using “savings numbers” as the sole measure of our self-worth.

As you enter different stages of life, your expenses will change. Unlike the simpler life of a student, entering the workforce might mean spending more on professional attire, skill development, and upgrading work tools.

Though spending can be painful, looking at it from a different angle, these expenses signify new challenges in your life and personal growth. You’ll start wanting to present yourself better, acquire new skills, and work more efficiently, which helps you improve. Recognizing this can lead to more mindful spending and reduce unnecessary impulsive purchases.

One of our users, who started budgeting as a student, shared their experience of entering the workforce: “Starting to work and earning a salary gave more significance to saving for the future; how far a salary can take you depends on how you manage it, and budgeting is an excellent tool for this.”

Feeling financially lacking isn’t because we genuinely have too little, but because we lack a plan for the future, losing our sense of control. To reduce anxiety, start by understanding yourself better and creating a sustainable financial plan that suits you.

Understand Your Preferred Lifestyle

“Financial management” is not just about saving money. Making informed spending decisions to enhance life experiences is also crucial in shaping your financial perspective.

Budgeting helps control expenses and offers the hidden benefit of helping you understand yourself better, including your values and preferred lifestyle. Many people discover they’re food lovers only after categorizing their daily expenses!

Spending isn’t just about the immediate transaction; it includes the subsequent usage and experience of the goods and services. Understanding your needs deeply helps you use money wisely to extend your happiness.

If you love sharing good food, don’t be too frugal with meal expenses. Plan for a few nice meals each week or share your food adventures with friends. This can reduce the feeling of deprivation while saving and keep you looking forward to something in life!

When you learn to use money to enrich your life, adding adventures and challenges rather than just satisfying temporary shopping desires or comparisons, you’ll reduce financial anxiety and not be upset about specific expenses.

Track Spending to See Your Growth Path

Recording daily expenses enhances your awareness of your financial situation and makes “financial management” feel less distant. Budgeting is like keeping a life diary; reviewing it periodically shows how your spending patterns change with your values: prioritizing health by buying better quality food, investing in better sleep with comfortable pillows, or increasing spending on books and online courses for self-improvement.

Examining each expense to determine if it’s a “want” or a “need” helps you quickly judge future purchases’ genuine necessity. Expense records faithfully show your growth path, helping you find the best financial management methods and design an ideal and enjoyable lifestyle!

Ask Three Questions Before Spending: Maximize Happiness with a Limited Budget

If you’re hesitating over a purchase, use these three questions to help make a decision:

1. Is this an experience I can relive and share?
2. Does this expense align with my characteristics and values?
3. Does this expense connect with my goals?

Look at your past three months of budgeting records and recall how each purchase made you feel. Maybe there’s an online shopping order you regret, or a dining expense that brings back happy memories of a weekend with friends.

With many things to buy and a limited budget, ask these three questions to determine if the purchase will enrich your life!

1. Is this an experience I can relive and share?

If you’re unsure how to reward yourself, the simplest way to decide is:

Buy experiences, not things.

Attending a music festival offers a thrilling and emotional experience that buying an album cannot match. Years later, you’ll still find it worthwhile!

Some items can also bring ongoing joy. Buying a guitar means each practice session brings new rewards; purchasing yarn and crochet needles lets you create various crafts; getting a Switch to play with friends builds shared memories and camaraderie.

These memories and experiences don’t depreciate. Sharing them with friends and connecting with others makes us feel happier.

2. Does this expense align with your characteristics and values?

Though it seems like we have choices about spending, we often make unsuitable choices influenced by social media or societal trends.

For instance, if your profession or hobby doesn’t require high-end tech equipment, you don’t need the latest, trendiest gadgets. Instead, consciously choose to allocate your budget to things that suit your needs better. Similarly, wanting to develop a workout habit is great, but everyone’s approach varies. For those who regularly hit the gym, a gym membership is a motivating expense. Others might prefer outdoor activities like walking, hiking, or exploring, which can be more enjoyable forms of exercise.

Understanding yourself helps you make choices that create lasting positive impacts. Make every expense contribute to the life you want, without being trapped by guilt over spending.

3. Does this expense connect with your goals?

Maybe you aim to have a secondary income besides your primary salary in the future. From this goal, think backwards about which short- and medium-term milestones to achieve first. Before every expense beyond essential living costs, consider if it brings you closer to your goal.

If you’re into photography, your short-term goal might be to build and share your portfolio, and develop your personal brand. The medium-term goal could be to turn your hobby into a side income skill, requiring investments in equipment, improving aesthetics, and honing photography skills. These steps will help you build valuable “intangible assets” to achieve your goal gradually. Having lasting, meaningful pursuits keeps us enthusiastic about exploring more possibilities!

There’s a common misconception in learning to save and manage money: that having more money will resolve anxiety and make you happier.

In The Happiness Project, author Gretchen Rubin discusses the relationship between money and happiness: “The secret is to 'be yourself' and choose wisely. What makes me happy is spending money on things I value. Being aware and disciplined helps me understand what I truly want, rather than just copying others’ desires.”

True happiness comes from self-awareness. Ensuring that every choice, big or small, aligns with your values reduces inner conflict and achieves balance. This process isn’t easy, but hopefully, you’ll build a unique life at each stage, spending thoughtfully and designing a more interesting life!