Wednesday, June 11, 2014

Why Newly Graduates Need Financial Management Education

The reality

“Hello world! Here I am, ready to face you! Ready to become an independent young professional!” the newly graduate exclaimed after getting his diploma.

Now the newly graduate is “ready” to face the big world (or he thinks he is). He landed on a good job with enough compensation. He is happy because he is now earning. He can now go to the places he has not visited yet during school days. He can now eat on the fine dining restaurants his allowance cannot afford before.

A year has passed; he got his first credit card. He can now shop in a more convenient way. He can get all the latest gadgets he want in just one swipe of his credit card.

Few years passed, he was promoted. He now has more than one credit card. He keeps on spending thinking that he could always pay his credit card bills because he has a good paycheck.
More years passed, he got married and got children. He has never changed his bad spending habits. He was always tired from work, and when he came home, he doesn’t have the energy to play with his kids anymore. Sometime he wanted to resign, but he know he cannot. Because he has lots of bills to pay.

The cycle keeps going.
He works hard. He receives his salary. He pays the bill. He spends for his family. He saves nothing.

That was the sad story of most highly paid, hard-working professionals.
They are good. They are industrious. They have a good salary. But why most of them are broke?
That’s because…
They lack financial education.

Do you get the picture why you need to learn more about financial management?

Well, here are 2 big reasons why you need to continue studying about financial management after graduation.

·         Because Financial Management was NEVER taught in schools.

Well, maybe you are wondering what I am really talking about. Yeah, because I believe that most students never heard the term “financial literacy” during their school days.

Schools train us to become professionals. Schools shape our skills to become good employees. During the past generations, completing a bachelor’s degree will give you a great fortune. But in this new generation, being an employee cannot guarantee you to become financially independent. The world is getting tougher especially when it comes to global economic crisis, and you need to be ready for any changes.

Sadly, school doesn’t teach or train you to prepare for economic crisis. Schools just give you theories and academics. But schools never teach you how to manage your money, or how to save and invest. Schools do not make you see the reality – the bigger competition in life. School never teaches one of the very essential subject in life – financial literacy. And that is a big reason for you to educate yourself about this important matter!

Most people think that college diploma means success. Most employees have stopped learning after graduation. Even people who have their post-graduate diplomas and certificate never learn the financial education. They became employees for all their lives, because that was the old school way taught us – to study hard and find a secure job.

·         Because your spending habit is a great factor to your future

Another big factor for your financial independence is your habit on how you spend your money.
Try to remember your school days. You receive enough allowance from your parents. You have your money for your basic school needs. Sometimes when there is excess from your allowance, you have your money to buy your wants. You buy extra foods such as ice cream, or eat on fast foods with your best friends. You buy extra clothes for your fashion desires, or go to a movie with your classmates.

After graduation, you now have your job. The money you get from your salary is much better than your allowance you receive during school days. You started to buy more things that you want like latest gadgets. You started to eat often on elegant restaurants. You buy unnecessary clothes and shoes that you stuck up in your closets and racks. You started to travel more often.

Your money has increased, but your expenses increased too. You might have some savings in the bank but I bet it will not be enough.

Years will pass; your salary will increase, along with your expenses. If you will not learn how to manage your money, you will be suffering in the future.

When a person lacks financial intelligence, he will become happy-go-luck in his life. His habit will just be spending all his salary, without preparation for his future.

You don’t want this to happen to you, do you?

P.S. We are providing Free Financial Coaching Seminars conducted by the Bo Sanchez Truly Rich Makers Team - IMG in Makati. Click this to register: Truly Rich Makers Financial Coaching 101

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