After what seems like a lifetime, you have finally graduated and landed that job you always wanted. Best of all, you are earning a monthly income.
The world seems like your oyster, but now is the time that young professionals should apply their minds to their finances and navigate towards a financially secure future.
“Generally speaking, there are four basic goals most people work toward. They save for retirement, an emergency, a major expense (such as a vacation, home, or new car), and they repay debt,” says Bokkie Cloete, manager of business development at Bank Windhoek.
Saving for the big things in life, such as a vacation or a new home, can come later, after you’ve cleared your debt and have a considerable amount of money tucked away, “just in case.”
“It’s about being prudent in your choices. Prudent means that you are acting with or showing care and thought for the future. Acting prudently will help you achieve your goals quicker,” says Cloete.
Repay your debt. If you’re dealing with debt, focus on the loans with the highest interest rates first, such as credit card debts. Make the minimum payments on any other debts.
Establish an emergency fund. Look at your monthly income and multiply it by six. That’s the minimum amount you want to eventually have in your emergency fund. This fund is meant to cover things, such as a high medical bill or car trouble.
You don’t have to build the fund in record time. Start by contributing what you can afford after necessary expenses, retirement savings, and debt payments.
Start saving for retirement. Even though retirement is decades away at this point, you want to start saving something now, either in an employer-sponsored plan or an individual retirement account.
To assist young professionals in their quest for financial freedom, Bank Windhoek’s range of Selekt cheque accounts gives you access to a wide range of banking facilities.
In addition to the usual banking facilities, Bank Windhoek’s Selekt cheque account holders earn prime-linked interest on their credit balances and also get free travel insurance when purchasing tickets with a Silver or Gold Visa card.
“No matter how tough it may seem, by acting prudently you will reap the rewards and your future self will thank you,” Cloete concluded.