As a graduate just starting a career, what should you have in your mind about money?

To set any goal, one should carefully weigh its feasibility in reality. While some short-term goals are easy to reach, other long-term goals, such as getting married, buying a home, or retiring in comfort can take years or even decades to achieve. So, the earlier you start to plan, the more time you will have to accumulate the wealth you need.

First, you can set up a short-term goal. This could be an emergency fund to take care of unforeseen incidents, preferably enough to coversix months of your expenses.

Begin with a balanced account

With your goals set, being mindful of daily expenses is an essential skill you need to acquire. Beginners at work, usually with a low salary, are prone to spending more than they earns. They really need to pay extra attention to controlling the money that leaves their pocket and not run into credit card debt.

Save first, spend later

Forming a habit of saving is crucial for any youngster. The trick is simple. Always save any disposable income by default and spend only when necessary. Put aside 10-20% of your monthly salary as savings and only spend the remaining 80-90% for essential daily expenses. You can consider starting a savings insurance plan to take advantage of the interest rate. The earlier you start saving the more compound interest you can earn from your capital.

As for spending, one has to distinguish "needs" from "wants". If you can live life easily without a certain item for over a month, the chances are it’s not a ‘must-have’.

Manage your MPF well

When you begin to work in a company, the employer is obliged to ensure you are in the Mandatory Provident Fund after 60 days of employment. Both parties, you and your employer, contribute a minimum 5% of your salary each month to the fund. Never underestimate the importance of how a well-managed MPF plan can make a huge difference when you retire.

To enjoy a well-thought-out plan, you need to consider life’s, uncertainties. In order to protect yourself and your loved one's happiness, insurance is indispensable.

1. Assess your own protection needs

Think carefully about "why" you need to buy insurance and work out with your financial advisors the best planto meet your actual needs. Do NOT commit to plans just to help out the agent if he or she happens to be a friend.

2. Study the different products carefully

There are quite a lot of Insurance products on the market. Don’t pick one blindly. Study the different types of insurance products closely before making any decision. A good rule of thumb would be to start off with a plan with good coverage and affordable premium, such as term life insurance . The next step might be getting hospital insurance coverage and a personal accident insurance plan to insure against accidents and hospitalisation costs.

3. Be aware of your own ability

Just like other things you buy, you should be cautious when you buy financial products. Only consider more options if the basics are secure.

A future-proof financial plan would take into account three aspects of your life: your income level, your savings needs and insurance coverage.

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