The very nature of many new graduate employees who are a part of the millennial age group is that they often fail to have good financial awareness. Years of mounting student debts, government subsidies and hype surrounding their future earning potential has lead to a lot of poor financial planning ability. Here are some basic financial points you should help try to instil in your graduate employees to improve their current and future financial situation.
- Make use of support
At university, your graduate employees were used to having student loans and overdrafts to tide them over, but once in the real world, these debts can creep upon them. There are a number of support services available which they should make full use of.
- Make sure they understand their new bank accounts
Whilst at university it’s likely they were on a student account which offered a number of perks like 0% overdrafts and free discount cards. Make sure they understand the new plan they are on and to discuss any changes regarding fees with their bank if they are unsure.
- Consider major financial burdens
With a need to start commuting or paying large sums of rent to live near their place of work, there will be some large monthly outlays which they don’t necessarily account for. Encourage them to reconsider large expenses like paying for a car when it isn’t being used very much anymore.
- Understand repayment plans
Now that university is over, it’s time to start paying back tuition fees and loans. The amount they pay depends on how much they earn, plus the accruing interest on the loan amount. Without interest, repayments amount to around 9% of anything earned over £26,575 a year.
- Think about pension planning
Millennials these days are largely unaware of the importance of good pension planning, as that is too far off to be considered. Instill in them a need to start saving and help them out with any company pension schemes.
Bringing up such issues and helping to build good financial awareness can be tough to do as an employer. Especially if your employees are largely graduates or millennials. You may want to consider our graduate and apprentice workshop, which discusses these issues and more to improve financial aptitude. To find out more about bringing in one of these workshops, contact our team today.