"Pay yourself first:" How to manage your income

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Once the income starts to roll in, how can we effectively save for the future?

Do you ever feel like it’s impossible to save any money no matter how hard you try? With graduation season right around the corner, a lot of us are searching for a more permanent and stable job. But once the income starts to roll in, how can we effectively save for the future?

Scott Carrie is a Financial Advisor for Edward Jones. With the help of local mortgage agent Bill Fisher, the two shared some tips on how to save for long term investments.

1. Pay yourself first

Navigator. Londons student lifestyles magazine.

“Get started on saving for yourself as soon as you can because a lot of jobs nowadays don’t have pensions or other things like that,” said Carrie. “It’s easy to spend money on other things so get started as soon as you can. The challenge is that first step”

2. Don’t refer to it as a budget

“I personally don’t think they work very well when they have that label,” said Fisher. “It’s hard to be structured and disciplined like that on your own. I’d rather refer to them as savings goals. What is it that you are saving for first?”

3. Tackle your student debt!

“That is one of the biggest roadblocks for younger people,” said Fisher. “If you don’t know where to start in terms of what to save for, reducing your student debt will help you through many other situations in your life like applying for a mortgage, or applying for a credit card.”

4. Manage your credit

“There’s two things that build credit,” said Carrie. “That’s paying your payments on time, and not running your card up to its limit. If you go to the limit, it’s going to score negatively on the credit bureau. If you can’t afford it, don’t put it on your credit card. It’s so hard to get away from credit card data for charging 20 plus per cent interest. You can’t get out of that.”

5. Don’t be afraid to ask for help

“There is help out there,” said Fisher. “Meeting with a professional and setting up your goals, how to go about doing it, setting up automatic transfers. It’s doing those kinds of things and really being open to the advice from someone who has spent years helping others with your similar problems and actually looking long term instead of short term.”

Using some of the tips above, Carrie shared the advice he would give a first time home buyer with a Retirement Savings Plan (RSP).

“If their income tax free account is over $50,000 in income, I would say use the RSP. You can use the RSP for a first-time home buyer’s plan up to $35,000. So if you have $50,000, you can use $35,000 towards a down payment on a property. Then you have to repay yourself over 15 years. So for example, if you borrowed $30,000 out of your RSP, you have to pay back $2,000 per year, over the next 15 years.”

So, as you search for a job after graduation, it’s important to understand how to properly manage your income. And from financial advisors to mortgage agents, there are people out there willing to help with the process.