Congratulations! You have just graduated from college. Now what?
For some, jobs are lined up already, others are still looking for the right place to work, while others are taking time off to travel before stepping into the 9 to 5 world. And that doesn’t include those who might be continuing their education!
So what’s a recent grad supposed to do when it comes to money? Well, we like to keep things simple around here and decided to review financial basics. After all, if you don’t have the fundamentals down, how can you start working on the more complex things?
Create a budget (and stick to it!)
This is the most important thing you can do. Figure out what your total income is, then figure out what your expenses are for a given month. Once you have an idea for what money is coming in and what money is going out, set a maximum dollar amount you can spend in different categories. For example, don’t spend more than $100 per month on entertainment, $300 on food, etc. Once you figure out your budgeted amount of money for each category, add it up and be sure it doesn’t exceed your monthly income. If it does, you have to find places to cut back.
Save Money
Part of your budget needs to include money for savings. It’s important to get into the habit of putting money away every time you earn more money. If you can develop this habit at an early age, it will help you for the rest of your life. Even if you are just putting away a little bit of money, that’s ok. The most important thing is that you start saving something right away. The first savings goal you should try to reach? An emergency fund of 3-6 months worth of expenses.
Don’t Pay for Entertainment
There are certain things you can’t really avoid paying for like gas, rent, and student loan payments. However, things like eating out and entertainment are completely discretionary. Because of this, you have the opportunity to spend a little money or spend a lot of money on these activities. So if you are trying to stick to a budget and save money, try finding free things to do.There are a lot of free things to do. It just takes a little research.
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(Bonus: learn tips for paying off student loans)