11.1.2 Case study: New graduate  

When he graduated with a geology degree and got his first full-time job with a large mining company, Hyun gave a sigh of relief. His student debts had been growing and he had not been able to earn much while he was at university. Now, he felt, he could begin to get control of his finances.

For the first year, though, things didn’t get much better. Hyun’s starting salary had seemed like a lot of money, so he didn’t worry about his spending. But his expenses had jumped, too, and his debts were not getting any smaller. He decided he needed to analyze the situation and take steps to bring everything under control.

Hyun kept track of his income and his spending and found that if he cut back on his costs for clothing, gym and eating out, he’d have money left over every month. He figured he could pay off his credit cards in a year, while starting to build up an emergency fund. He could pay off his student debt five years after that, and then start investing his money to build the foundation for financial success into the future.

Hyun was not sure what his future was going to be, but he knew his first goal had to be getting his spending under control, paying off his debts and building a solid start to his savings.

Lessons Hyun learned:

• Even as a new graduate with few obligations, a financial plan helps to keep your finances under control and makes it easier to achieve your goals.
• When you have no clear goals, you have no sense of how much spending is too much.
• Short-term goals help you get control of your finances, an important first step.