4 Tips for Managing Your Money After Graduation
The choices you make post-grad will affect your financial future. The career you go into, the money management skills you have — these are all things that will follow you. Having a good understanding of your obligations and the goals you want to achieve will help put you in a prime position to succeed. With financial literacy month coming to a close, here are some things to keep in mind when looking to increase your financial wellness.
Choose your bank
Being comfortable with your bank is an important part of maintaining your finances. You may think that a bank is just a bank, but having a financial institution that works well for you is vital to your fiscal success. Whether they have great customer service or customer perks, being able to bank with ease will make budgeting a breeze.
There are many things you should take into consideration when choosing your bank. If you find yourself moving to a new city or state after graduation, you want to make sure you can still manage your banking wherever you go. While many young people don’t go to a brick-and-mortar location often, having one close by could help you with any of your banking needs in the present or the future. If one is not close by, your bank’s online banking system should be state of the art and help you do all of your banking remotely. Things like performing mobile deposits through their app, making transfers between existing accounts, and even opening new accounts are all things you may have to do if your bank isn’t close by.
When you begin your career post-grad, make sure to set up your direct deposit where you have money going into both your savings and checking accounts. Building up your savings now will help you create smart money habits for the future. You can make these deposits happen with your employer or manage them with your financial institution.
Be practical with your spending
Once you start earning your big paycheck, you might find yourself itching to splurge. The excitement of bonding with new coworkers over happy hour or joining their trivia night team can also lead to overspending rather quickly. While you are allowed to treat yourself, budgeting for this type of spending will help you keep your finances in shape.
Consider opening an account where you save up for these outings with a $10 deposit every week or maybe $30 every paycheck. If you save this money separately from your average spending money, you can truly enjoy your night out without worrying about overspending. Having the autonomy of a post-grad life means you can spend your money wherever and whenever you choose. Budgeting for these fun activities appropriately can keep you in control of your finances.
Finding cost-effective ways to do things that you enjoy will also help you make smart money choices. Shopping at the thrift store for new work outfits will help manage your money wisely and keep you on-trend as thrifting is very big at the moment. If you are moving into a new apartment, you can also consider buying your furniture from the thrift store; many items need just a little T.L.C. and can look good as new without the big price tag. Buying things second-hand can be a great way to incorporate new things into your life without spending more than you should.
Make saving a priority
Leaving college life behind means looking toward the future and figuring out what you want to accomplish. Saving money for your next milestones will keep you on track and excited about your next chapter. While retirement is many years down the road, beginning to save now will help alleviate financial burdens in the future. See if your employer offers 401K matching to help you boost up your retirement savings.
Beyond thinking of your later years, making it a habit of saving now will help you in times of economic distress like losing your job or dealing with another wave of a pandemic. Many recommend that your emergency fund should total three months of your salary. Making a savings account that is separate from the rest of your money will keep it out of sight and out of mind so you can save it without the temptation to spend.
You should also consider the purchases you will want to make in the not-so-distant future. Increasing your savings now will help you greatly when you are ready to apply for a car loan or start the home buying process with a mortgage preapproval. While you may be comfortable with renting an apartment now or driving around the car you’ve had since high school, chances are you’ll be ready to upgrade either of those things in the next few years. Weighing the pros and cons of making either of these purchases and how they could impact your budget will help you decide which you should save for first.
Manage your bills
Chances are, when you left college, you brought some student debt with you. Knowing how much debt you have and when you need to start making payments is key to making a budget that can succeed. Falling behind on student loan payments, much like any other loan payment, could take a critical hit on your credit score. If you want to pay down your student loans fast, take a look at the interest rates they have. The higher the interest rate, the longer it will take to pay down if you are only paying the minimum amount due each month. Making an extra payment on the loans with high rates will make the principal balances come down faster and help you pay them off quicker.
Many college students open up a credit card with the idea that they should have one in case of emergencies. Having that credit card can be good if you are responsible and you are making your payments. If you find yourself struggling to make payments or getting your balance down to a manageable amount, consider doing a balance transfer to a credit card with a lower interest rate. Many financial institutions have different credit card options that include cards with a low interest rate that you can take advantage of to make your debts easier to pay down.
You should keep in mind all that comes with living out on your own. Managing your rent is one thing, but keeping track of all of your utility bills is another. If you want to lower your energy bills, Regional Energy is the top choice for electricity rates in Edmonton due to pricing and customer service. If you have roommates, you also have the duty of making sure everyone is paying their portion of the bills. If you have a utility bill in your name and the payment is late, that could reflect poorly on your credit report. When choosing roommates, you should choose people who are responsible with their money and know when they need to pay their bills.
Your financial future depends on your ability to make smart money decisions. Knowing where your limits are and how much you are willing to spend each month will put your budget into perspective and help you save for the future. Making a budget that works for you can take some trial and error, but continuing to strive for financial success will help you in the long run.
Want more ideas on saving, earning extra money and just getting your finances together in general? Check out my free guide, Money Hacks 101: 50+ Ways to Find, Save and Earn More Money.
Click here or the image below to get instructions on how to access it: