For the recent grads out there or those who are about to enter the workforce, the stresses and pressures of adult life are a terrifying reality that comes all too soon. For me, I got lucky. I was able to secure a job at one of the top 5 financial institutions a month before graduation. Here I am, writing this exactly one year later on the very same day I walked across the stage to get my diploma. But enough about me, I'm here to share with you some tricks that helped me through my first year out of college. I hope some of this helps you.
1. Take Advantage of Your Bank Account.
For most of us who are in school or who have graduated, student loans can be daunting. The thought of being in debt for the next ten years to pay for classes you most likely skipped doesn't sound so appealing. For me it took a phone call from my mother informing me I had missed my very first student loan payment to make it my reality. From then on out I made the decision to never miss another bill. Whether it's rent, utilities, student loans, or a gym membership, I use my banks bill pay so I never have an excuse to miss a payment. Find out your total expenses and make sure you have at least that much in your account to pay them (tip: USE DIRECT DEPOSIT!!!). Once you have all your bills set up to be paid you never have to worry about forgetting another ever again (or worry about a missed payment ruining your credit).
2. Pay Yourself First.
One very important lesson I've learned is that it's important to pay yourself (along with your bills). Now let's say for example, your student loan payments are $300 a month. You think to yourself "Hey, if I can afford to pay $400 I'll pay off my loans even faster!". Now this may be true, and this could possibly be the best option for3.3 you, but it is important to think about YOUR OWN personal goals for saving and debt management. For some of you ( myself included), it makes more sense to throw that 100$ into a savings account or better yet, contribute that to your company's 401k plan or your own personal Roth IRA. By taking advantage of compound interest, you can watch your savings grow over the years while at the same time paying off your debts. The lesson to be learned here is that It is important not to lose sight of your savings goals as you pay off larger debts. Compound interest adds up quickly so don't miss out on all the interest you can receive now in your early twenties.
3. Don't Give In to Lifestyle Inflation.
After getting your first job, some of you may be pleasantly shocked by that starting salary figure (though most often not the tcase). Considering less than a few months ago you were searching for loose change in the couch and recycling cans in order to pay for a 30 rack of beer (we've all been there) it may seem like your rich with this big number in mind. It is important not to let this go to your head. Let's be real, that salary figure they offer you is BEFORE taxes so for those of you who live in states with high taxes, don't be shocked when you see Uncle Sam reaching into your pocket for a good chunk of your paycheck.
So you've worked hard at your new job, things are going well and your offered your first promotion, great job! This is when you're most likely to fall victim to lifestyle inflation. Your first thought will probably be about buying something now that your flush with a few extra bucks. I found it most beneficial to stick to my previous budget, give or take a few dollars, and contribute that extra cash to bills, savings, etc. This is probably the number one trick that has helped me pay off a decent amount of my student loans already only a year after graduation.
If you can take away at least one thing from my advice, it would be to keep track of your money, after all, you've worked for it. You don't have to be a banker to operate a simple budget on an excel sheet. There are even plenty of apps that help you budget and track how you spend your money. Take advantage of the technology we have today and put it to work for you. You'll thank yourself years from now.