So – you've graduated and landed your first “real”
job. And now, you probably feel like you're swimming in cash. But as difficult
as it may be to believe right now, your financial situation can change at any
moment. That’s why it’s so important to budget wisely from the get-go.
You never know what could happen down the road –
and in any case, it’s always a good idea to start building up savings. Though
you may only be earning an entry-level salary, there are lots of ways to
stretch those dollars to save money, avoid incurring debt and set the stage for
a lifetime of financial freedom.
The best time to start budgeting and saving money?
Right now. Start putting these five budgeting tips to work today:
1. Keep it simple
With steady money flowing in, you may feel ready to
buy a house or car, or make other “grown-up” purchases. But doing so will put a
serious dent in your cash flow, and there's no need to rush. For a little while
at least, stick to renting with roommates (or even living with your
parents, if money is a big concern). If you need to, buy a used car or keep the
one you already own. You have the rest of your life to worry about a huge car
payment or down payment on a house – start saving for it now.
2. Use technology to help you budget
Most people don’t have an innate understanding of
budgeting and managing money. Why not put technology to work for you? With an
app like Mint, you can stay on top of your financial
situation without lifting a finger (or doing any real number-crunching). Just
enter in your income, your monthly expenses, and your debit and credit card
information, and the app will notify you when you’re exceeding your budget and
when important bills are due.
3. Set up your 401(k) ASAP
Many first-time workers don’t think much about
retirement planning – after all, retirement seems like a long way a way. But as
tempting as it may be to hold off on saving for retirement, the sooner you
start, the better your nest egg will ultimately be. Sure, your paychecks will
be a little smaller now. But down the road, when you have a sizable amount set
aside for retirement, you'll thank your younger self. So review your benefits
package, talk to your HR department, and start contributing to your 401(k) –
now.
4. Automatically transfer money to
savings
Even if you promise yourself you'll take some of
each paycheck and put it into a savings account, that can be hard to do. Maybe
you’re tempted to make impulse purchases with the money instead – or maybe,
despite your best intentions, you just forget. A great way to sidestep this
potential problem? Have a small portion of each paycheck automatically
deposited into savings. By doing this, you won’t have a chance to miss the
money – and you’ll see your savings account grow.
5. Get a head start on student loans
The sooner you're able to pay off your student
loans, the better off you'll be. If you can, avoid deferring your loans and
start paying them off as soon as you’re financially able. Use a tool like Tuition.io to
help you analyze your total debt, your monthly payments and your interest rates
to help you figure out the fastest way to pay them off. You'll be amazed by
what a difference a few extra payments can make, especially when it comes to
interest.
By budgeting and saving from the get-go, you’ll be
able to set the stage for financial freedom much earlier in life. What are your
tips for budgeting and managing money? Did you budget well with your first job?
Abby Perkins is Editor in Chief at Talent
Tribune, a Software
Providers blog dedicated to jobs, workplace culture and
HR technology.
