If you would like to take control of your financial life, then you do not have to start big. In fact, the best thing you can do for your future is to calculate how much money you make and how much money you spend. In other words, it might be helpful for you to make a budget and to learn how to save money based on your income and expenses as well as age.
If you are a new grad, then you may also want to learn money-saving tips that include student loan refinancing and starting a retirement account. Taking control of your finances has many benefits. For those individuals who have never kept track of their spending or who have never saved money, getting control of their finances might seem scary. But if you would like to learn advice on how to save money and implement a financially savvy life, continue to read the below sections.
Creating a Budget
Creating a budget is not meant to limit how much you spend. It is intended to create consistency with your spending. That way, you do not have to become overwhelmed at the end of the month with the state of your finances.
Once you have decided to create a budget, you will need to know how to set one up and how to follow it. Creating a budget requires many documents such as pay stubs or similar income documents. You will also need to determine how much money you spend each month on your fixed expenses, which are expenses that do not change from month to month such as rent or mortgage, car payments or insurances. After you have gathered your fixed expenses, you will collect all your other expenses such as gas, groceries, clothing and entertainment. If you are not sure how much money you spend each month on expenses, then you can download budget and spending apps on your phone or tablet to help you track your finances. Many of these apps sync both your bank and credit card accounts so that you can monitor your spending without having to make a conscious effort. Once all of this information had been gathered, you are really to set up your budget and analyze the results. Whatever money you have leftover after you have determined your budget, if any, can be used for spending or additional savings.
In short, you should be saving as much money as you possibly can. The amount that you will save depends on your age, income and overall expenses. If you can, then you should start saving as soon as you enter the working world. Otherwise, years or decades can go by before you know it and you have not set up a savings goal. You do not want to near retirement or when it comes time to purchase a home and not feel financially secure. By starting to save for the future long before you need to use the money, you are creating a sense of financial security.
When you begin saving, start small. Take a small percentage of your income each month, put it into a separate account and get financially comfortable with subtracting that money from your budget each month. To set up a savings goal, it is also crucial for you to be aware of all your expenses. The more financial obligations that you have, the more money you will be spending each month and the less you will be putting into savings. By being conscious of where your money is going, you can set up realistic financial goals.
Once you realize that you can meet your monthly financial obligations without needing the money that you are putting into saving each month, try to increase the percentage you are saving. You should also increase the percentage the older you get and when you theoretically start to receive pay raises or promotions.
Money-Saving Advice for New Grads
You do not need to wait until you have established yourself in the working world to start saving money. In fact, if you plan to retire comfortably, then you should start saving money as soon as you graduate.
If you are a new grad, then there are ways for you to save money. Even if you are unable to put aside money each month into a savings account, simplifying how you live may be enough. When you are fresh out of college, opt for living with roommates especially if you live in a big city. Roommates drive down the cost of rent as well as the price of utilities, cable, internet and any fees that renters are responsible for taking on. If it is an option, then you should consider moving back in with your parents. If they do not charge you rent and if it is a healthy environment to live in, then moving back home will save you even more money, which you can later use for a security deposit on your own rental or even a down payment on your own house.
If you land a job after college and your employer offers you investment options, then take it. Starting a retirement account such as a 401(k) fresh out of college can double your initial investment by the time you are ready to retire. If you start to put money in a retirement account when you first start working, then you will get used to living on an income that does not include the money you are adding to your retirement account. That way saving for your retirement becomes a habit rather than feeling like you are struggling to save later in life. When you start saving for retirement later, you have to save more in a shorter time period, which can be stressful with additional responsibilities.
Learn Further Financial Advice
Learning and implementing financial advice does not need to be a burden and it does not have to be time-consuming. If you make changes in your life, many of which are simple, then you can keep better track of how much you spend, how much you are saving and how you deal with certain situations that you may be faced with each day. No matter which advice you choose to apply to your life, you are taking the effort to be responsible and smart with your available resources, which is moving you one step closer to your financial goals.
By Mathew Sams –