Financial Tips for New Graduates

Congratulations on graduating university and entering life in the real world! :) I graduated a year ago, almost to the day, and I have some financial advice to share with you! It's strange going from student life to working to earn more money than you ever had before, so it's important you pay attention to what you're spending to live happily within your means.

Live at home if possible, rent a cheap room if not – It's not glamorous, but living with your parents for a year or so while you save some money will save you so much money! I pay my parents £40 a week in rent and bills, which is a lot cheaper than even lodging would be. If that's not an option for you, try lodging or getting a flatshare with some friends. 

Start an emergency fund – The first thing you should do when you start earning money is put at least 10% of your wage straight into a separate bank account, to provide a buffer in case of emergencies. You might need it for expensive car repairs or job loss or visiting a sick relative, but ONLY use it for emergencies! Save about £1000 before focussing on repaying your overdraft/credit card debts.

Look for the perfect job, but get ANY job to tide you over – First things first, apply for Jobseekers Allowance. That's what it's there for, so don't feel embarrassed! Spend most of your effort hunting for that perfect job, but apply for any high-turnover job you see too; earning minimum wage is better than getting just £56 a week on the dole. Over the past year I've worked as a chambermaid in a hotel, in McDonald's and as a waitress. It's lame but it pays the bills while you get something better!

Don't pay off your student loans early! - I encourage you to blatantly ignore your student loan! :) In April you will begin repayments of 9% of whatever you earn over £15,000 (which will be automatically deducted from your wages). If you have any spare money you should put it into a savings account (like an ISA) rather than paying down your loan, because you'll make more in interest than you save yourself by lowering the debt. This debt does NOT affect your credit rating. 

Do pay off other debts ASAP – Unlike your student loan, your overdraft and credit cards WILL affect your credit rating. You will also likely be charged interest on credit card debt, and while your overdraft might be interest-free now it will not remain so forever. After building your emergency fund, pay these debts off aggressively (as much as you can afford, not just the minimum payment!) and save yourself a LOT of money in interest!

Avoid having a car – If you can use public transport to get to your job, DON'T get a car. Including £300 of repairs, buying and running my old Peugeot Jools has cost me around £3000 this year! OUCH! Don't even THINK about buying a brand new car! Put what you would pay in car payments into a savings account and pay cash for a second hand one in a few months time!

Don't buy things you can't afford – Purchasing things using credit means you often pay through the nose in interest. Credit cards are great for building a credit rating IF you pay them off in full every month. If you can't trust yourself to do that, don't use them!

Keep a spending diary – Do you wonder where your money goes? Of course you remember the big things, but a few pounds here and there really does add up. Keep a record of your spending (it only takes a couple of minutes a day) and use it to stay in control of your budget!

So there you have it. Good luck out there in the real world! It's strange to finally leave education (maybe that's why I'm going back again, haha!) but it's a new chapter in your life. Make sure you start it right!

Unemployment

I'm stressed about finding more work at the moment. Can you tell?

Recent figures have shown that UK unemployment reached a 17-year high in June-August. 2.57 million people were out of work, which included nearly a million 16-24 year olds (21.3% of those eligible to work). For five days I was one of those unemployed young people.

I regularly check the JobCentre Plus website for new jobs. The majority of positions advertised in my area are either 2-16 hours per week minimum wage roles or self-employed things like leaflet distribution or Avon representatives. There are very few “white collar” professional jobs, partly because they are advertised on more specialised websites, but also simply that there are none around. It's probably a problem everywhere, but in Cornwall especially young people are forced to leave the Duchy to find the jobs they have earned through years of study. The reality is that companies do not want to create new jobs in the current economic climate, for fear that they will have to downsize in the future. Many new public sector jobs have to be filled from other civil service departments rather than being opened up for new people to enter the system.

Imagine an unemployed person. Did you imagine someone sitting on the sofa, staring at endless channels of daytime TV drivel? Most people WANT to find work. Trying to find a job requires HOURS of work each day. I was searching and applying for jobs for about 6-8 hours each day. It was far more mentally draining than a regular 9-5!

I hate the ever-increasing unemployment rate. There are a lot of things I disagree with David Cameron about, but one thing he said was sadly true, “every job that is lost is a tragedy for that person and for their family”.

How to Find a Job

The recently released UK unemployment figure for July was 2.51 million, or 7.9% of the working population.

I feel for the majority of people who are desperately trying to find work. It is very difficult to find a professional job in Cornwall, where the majority of positions are seasonal roles related to tourism. I applied to many research places only to be outcompeted by people who should be able to find much better opportunities (although fortunately have now found a position that should start next month).

Here are a few things I learned during my search:

Spend SEVERAL hours a day looking and applying for work – Treat your job hunt as the full time occupation that it is. I spent 4 to 8 hours most days looking and applying for the latest positions advertised in my area.

Where to search – As well as your local paper, you should regularly check the government's Jobcentre Plus website, which has all of the positions advertised in your local Jobcentre. Check it every day because the best jobs are rapidly snapped up. If you know what area you want to go into, search on websites dedicated to your field (for example I regularly checked the New Scientist website for science-y roles. You should ask around in case anyone has heard of a job opening. Walking through town you will see several job advertisements in shops and local businesses. Keep your eyes and ears open!

Claim Jobseeker's Allowance – If you are over 18 and actively seeking work you are entitled to Jobseeker's Allowance, so don't feel embarrassed to claim support whilst you are unemployed. If you are under 25, you are entitled to £53.45 per week. It's not a lot, but it'll help you get to job interviews and keep food in your belly.

Find a high-turnover job to tide you over – Jobseeker's Allowance is useful, but no-one can really live on £53 a week. Find yourself a seasonal or minimum wage job with a short period of notice (most will be just one week so you can leave as soon as you find something better) and flexible hours. This will give you some financial breathing room whilst you hunt for the perfect job for you. For example I spent this summer working for minimum wage as a chambermaid in a hotel, receiving ~£180 a week for ~34 hours work. Ensure that you sign off from Jobseeker's Allowance once you find a job, even if it is just temporary.

Tailor applications to each role – Once you've found something to apply for, research the company and the position and tailor your CV (resume) accordingly. What skills does the job need? Which of your experiences is the most relevant? Ensure that if they ask for a particular skill you give examples that show you possess it. If you have related work experience it should be on the first page of your CV, however if you are changing careers you should have key skills on the first page instead.

Send speculative letters – If the companies you want to work for aren't hiring it's time to get pro-active. Write a speculative letter (and accompanying CV) describing why you would make the perfect addition to their company. List your skills and experience and how it relates to what they do. This is how I got in contact with the company I will be working for soon. Often you won't even hear back from them, but you just might make them think about potential opportunities they're missing out on!

Don't give up – It's can be soul destroying to keep receiving rejection letters or not even hearing back from applications you spent hours perfecting. Don't forget that you are competing with people who are likely a lot more experienced than yourself, especially if you are a recent graduate like myself. The best thing you can do is to just keep going!