Meet the Other Phone. Child-safe in minutes.

Meet the Other Phone.
Child-safe in minutes.

Buy now

Please or to access all these features

Higher education

Talk to other parents whose children are preparing for university on our Higher Education forum.

Financial Advice for New Graduates

5 replies

ginowitz · 22/06/2023 22:19

What financial advice would you give new graduates?

DD has just graduated and got a very well paid (but long hours) job in the City. Aged 23 she’ll earn more than I ever have.

She’s aiming to do “a third, a third, a third”. So spend 1/3 take home on rent & housing bills, spend 1/3 on fun & food, save 1/3 for pensions and savings. Although I have pointed out that at today’s prices, the saving amount might be a tad optimistic!

OP posts:
Cantstandbullshitanymore · 23/06/2023 13:37

I think it’s great she is thinking like that and she can make adjustments if she needs to.

She should focus on starting to build her savings/investments now before she gets too used to spending her full income.

She should learn about the power of compounding and starting to invest early and avoid mistakes people make where they save but just leave the money in their account and lose out on lots of growth

I think many people in the UK have grave plans to retire on state pension without realizing how much state pension is.

She should avoid unnecessary and excessive car debt like this:

https://www.reddit.com/r/UKPersonalFinance/comments/14gumlp/how_can_i_convince_my_brother_that_financing_a/?utm_source=share&utm_medium=android_app&utm_name=androidcss&utm_term=1&utm_content=share_button

Sounds like she is thinking about the right things. I started my career in the city as well I’m investment banking and it’s very very easy to get sucked into the keep up with the Jones’s mindset.

Reddit - Dive into anything

https://www.reddit.com/r/UKPersonalFinance/comments/14gumlp/how_can_i_convince_my_brother_that_financing_a/?utm_source=share&utm_medium=android_app&utm_name=androidcss&utm_term=1&utm_content=share_button

Badbadbunny · 23/06/2023 14:33

I like her thinking - just giving some thought it 90% of the way there really. So many don't plan or think about money at all.

I think given the cost of housing/renting, the 1/3 plan may be unrealistic. My son has got a graduate job starting soon as we're completely shocked re housing costs - a studio or small 1 bed flat will cost half his take home pay, and that's before power, rates, insurance, phone, etc, so it will be more like 2/3 just for living costs, and then maybe 1/6 for food & fun and 1/6 for savings!

We've talked at length with DS, not just recently, but going back a few years too, about finances etc so nothing is coming as a surprise. He'd been remarkably self-controlled with spending whilst at Uni, going to the supermarkets looking for yellow stickers, BOGOFs etc and restricting himself to 1 takeaway/meal out per week.

When he started Uni, we discussed student loans and we jointly made a spreadsheet showing the loan repayments, interest and length of time, based on different salary levels, so he wants to prioritise paying that off as he couldn't quite believe the amount of interest he'd have to pay!

Besides the spending/saving dilemma, just make sure she's building up her credit score/history. Make sure she gets a mobile phone contract in her own name, that she gets a credit card and uses it for small amounts paid off in full every month - get her on the electoral roll in her new flat, etc. Every little helps! Same with driving, get her on your own motor insurance as a named driver (assuming she doesn't have her own car already), so that she's building up at least some claim free history.

The other thing we've told our son is to sign up for whatever "offers" the employer is making available, such as discounted gym membership, discounted life insurance, full pension contributions, discounted private health insurance/dental insurance, etc - those "benefits" are usually very valuable, especially things like life, health & dental insurance which will cost more if taken out at an older age - they're usually dirt cheap if taken out when young, even more so with employer discounts!

SiouxsieSiouxStiletto · 23/06/2023 17:50

Does she know how much her student loan repayments will be each month yet?

GatesOfBabylon · 23/06/2023 18:36

Tell her to create a spreadsheet of SIPP contributions plus Tax Relief with an average stock market return (US S&P500 is 9.5%) until she can access it and retire early. She’ll realise how easy she can make herself a millionaire by starting agressively and early.

Xenia · 23/06/2023 23:18

I left it up them other than helping them buy a first property and graduating with no student loans. They are all pretty sensible although life is expensive including childcare costs once their children come. I have earned reasonably well though so not in a position of having children who when they graduated earned more than I did.

New posts on this thread. Refresh page