You completed a program of your choosing so that you can have a lucrative lifestyle and not have to be one of “those people” that worry about saving their money. If you truly feel this way then please think again. There is not a single person that is above saving their money, in fact some of the richest people (Warrent Buffet and Bill Gates) have been known for their frugality. Before I get off topic and you decide to close this link, let me jump right into the list of why new college graduates should save money:
1. Life will never be this good again. No matter your situation right now, it will become a lot more difficult in the future. Once you buy your own property or start renting, get married, have children, etc. life will be so expensive that even your lucrative salary will seem like it’s not enough.
2. Emergency fund. No matter how untouchable you feel in your early 20s, every human being needs to have an emergency fund because shit happens. I am not going to give any examples because emergencies come in all shapes and sizes, once you experience one you will realize the importance of having extra money available. An emergency fund should typically contain 5-10% of your yearly salary (EF increases once you get married, have children, so on). IT should not be touched unless it is an absolute emergency, going to Cancun for Spring Break is unfortunately not an emergency.
3. Purchase property/have money for rent. Whether you want to purchase some form of property for you to live on or have enough money to cover your rent for many months ahead. If you have no money saved you will most likely never obtain a mortgage in your life (unless you were in the United States, 2006)
4. Set you on the right path. If you do not get into the habit of saving in your early 20s then you will get a cold reality check when the day comes where you realize you have to save or you will not make it. For many people this day happens when a child is born or after they are married and realize how expensive life has become.
5. Have more money for what you truly enjoy. What I mean by this is that the less money you spend on clothing or random dinners out at a fancy restaurant, the more money you will have to spend on the things that truly make you happy. Everyone has a different perspective on what they enjoy, whether it is travelling, visiting family, or educating yourself. The point is by limiting you’re spending on useless purchases, you will have more money to enjoy your life. Now let’s see, what’s better new jeans every week or a couple of relaxing vacations a year?
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