According to Payscale.com, the average recent college graduate makes around $30,000. Unfortunately, this can quickly disappear in the midst of expensive living costs. Here are five ways that recent graduates can save money.
1.) Make a Budget
As a recent college graduate myself, I understand that the word “budget” is about as desirable as going to the dentist. In my own personal life, however, I’ve realized how much unnecessary money I spend when I’m not living by a budget. Dining out here, daily Starbucks runs there, and other expenses can quickly add up to several hundred extra dollars a month. If you’re trying to save money, the best thing to do is sit down and make a budget of how much you think you’ll need to spend on your fixed costs (housing, insurance, loan payments), as well as your fluctuating costs (such as entertainment and travel). If you don't have a budget yet, hop on over to TIME magazine to check out this link on things grads can do to get hired. Once you do have a steady paycheck coming in, you can use a service like Mint.com, which accesses your bank account and shows you how much you’ve spent on various items for a particular month. Although it takes time to figure out exactly how much you need to budget for various items each month, being conscious about making a budget and sticking to it saves lots of money in the long run.
2.) Start a Savings Account
Experts recommend putting at least 3-12 months of living expenses in savings for emergencies (such as being laid-off or repairing your car.) You should put at least 10% of your paycheck into a savings account each month. If you can afford to save more, then do so! But 10% is a good starting point. This will prevent you from finding yourself in a financial pinch down the road.
3.) Pay Back Those Pesky Loans
While it may be tempting to defer payments, doing so will rack up exorbitant interest rates. Make sure that you always pay the minimum each month so that you avoid incurring extra fees. And whenever you have some extra money, put it toward your note’s interest. And make sure to avoid credit card debt.
4.) Avoid Frivolous and Unnecessary Expenses
The quickest way to blow a budget is through buying “wants” instead of needs. You may want designer clothes and handbags, restaurant meals each night of the week, and fancy haircuts, but you don’t really need them. Avoid impulse purchases by not buying anything over $50 without spending a couple days thinking about the purchase and doing some research to make sure that it’s a solid investment.
5.) Figure Out How to Cut Costs
If you live near family, consider living at home for the first year or two. This allows you to funnel the money you would be spending on rent into chipping away at loans or adding to your savings account. If you already have an apartment, consider finding a roommate so that you can share costs for rent. Clip coupons and buy groceries on sale to save money. Get a subscription to a library so that you can check out movies and books from them instead of buying them. Take your own lunches to work instead of dining out each day. Learn to cook so you can make meals at home. Invest in a coffeemaker so you can avoid spending $5 a day on Starbucks lattes. Figure out other simple ways to save on expenses so that you can live within your means.
About Author:
Rebekah Ann writes about issues related to millennials.
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