Graduates are more concerned with personal financial goals than with their obligations, but both wind up becoming reasons to feel pressured as they face hard realities.
TD Bank recently conducted a survey of more than 6,000 Canadians aged 18 and above, 4,135 of whom were graduates of post-secondary studies who found a job after graduation. The study found that the top sources of financial pressure among them are the pursuit of financial independence (52%), saving money to live on their own (39%), and repaying student debt (23%).
When it comes to striving toward their goals, the survey respondents faced numerous challenges. For two in five (41%), finding a job took up to one year after graduation. Among those who found employment, 41% earned less than they were expecting to. They also were caught off-guard having to deal with expenses for transportation or commuting (33%), meals (25%), and work-appropriate clothing (23%).
After experiencing all those rude awakenings, graduates experienced feelings of distress and inadequacy. Almost half (47%) reported feeling anxious or overwhelmed at having to manage finances on their own, and 60% felt guilty after spending money on things they wanted instead of other financial commitments like debt repayment.
“Today's graduates are ambitious and motivated, but the realities of the job market can lead to feelings of financial pressure and guilt when they're unable to afford many of the things they want,” said Sue MacDonald, associate vice president of Everyday Banking Products at TD Bank Group.
To reduce such feelings, TD bank offered the following suggestions:
- Make a plan – Graduates should determine their goals and meet with a financial advisor to come up with a strategy.
- Set and stick to a budget – Living within one’s means is important. Drawing a harder line between needs, such as rent and debt repayment, and wants, such as travel or a new car, is necessary to streamline spending. Tracking one’s spending habits is also important.
- Find fun ways to save – Look for creative ways to stretch every dollar of income. These include cooking your own meals and possibly recreating some favourites from restaurants; buying gently used of vintage clothing rather than pricey designer outfits; and renting a car when you need it rather than buying one.
- Don’t try and keep up with others – Avoid setting spending benchmarks based on what friends and colleagues show on social media. Instead, discretionary spending should be determined based on one’s own income.
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