Starting out in life after school or tertiary education is an exciting milestone. It is one of the best times in life, with a future full of potential opportunities, without the responsibilities of dependent children to support and with few financial commitments. Anything is possible at this stage of life. However, it is also a critical time as making the wrong financial decisions when starting out can have long term consequences.

In the early years there is usually a bit of catching up to do, particularly for tertiary students. After a few years of living frugally, a new wardrobe of work clothes is a necessity, as well as perhaps a car, and furniture for a flat. Big expenses such as dental treatment and new glasses that were deferred in student days can’t be put off any longer. For the first few months it is difficult to save while all this catching up is going on. There is a danger that with all this spending, saving never gets to be a habit. Here are some tips to avoid making big mistakes:

• As soon as you start earning, start making a regular automatic transfer into a savings account each pay day, even if it’s just a small amount
• Focus on building up savings to cover emergencies and to enable you to pay cash for things you need to buy instead of going into debt
• Pay all your bills on time to avoid getting behind and avoid penalties or loss of early payment discounts. Paying by direct debit helps keep you on track.
• If you need to borrow money, for example to buy a car, borrow as little as possible and shop around to get the best interest rate.

Getting these basics right will set you on a good path for the future.