How to Budget as a New Graduate

As a college student, you may have lived the stereotypical scenario of living off coffee, ramen,and midnight runs for pizza. And even though you worked a part-time job, you may have still found yourself living paycheck to paycheck. Flash forward four years, and you’re now a proud graduate. You find a great job and are ready for this new chapter of life. So, as you enter the workforce, you also need to learn how to manage your money outside of a college setting. Below are a few tips on how to save, spend, and even invest while paying off your student loans.

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Create a Realistic Budget

Now that you’re working full-time, you need to know where your money is going. From covering rent and buying groceries to paying off student loans, every penny has a purpose. Creating a budget that represents your real life is one of the best steps for financial improvement you can take.

Refinance Your Loans

If you have student loans, you might feel like you’re just treading water. In fact, it might feel like the more you pay, the more you pay. Thankfully, you do have options. In addition to using the 50/30/20 approach as a guideline, you can also consider refinancing. When you refinance student loans, you can roll all of your previous loans into a new one. In turn, you pay less interest and may be able to pay your loans off faster as well

Prioritize Spending

How you spend your money is just as important as how much you spend. Make a list of your financial priorities, which should include an emergency fund, money set aside for monthly expenses and money that’s considered mad money.

Think About Investing

Even if it’s only $5, you should learn how to invest. The key is to start when you’re young. Over time, you can learn about the different types of investments and how to grow your money as you get older. There is plenty of free information online to help you get started.

Build a Retirement Fund

It’s never too early to start saving for retirement. You can choose to automatically transfer a set amount each month into a savings account, or you can set up a separate account. It’s important to find ways to grow with you, so you have a nest egg when you turn 65.

Improve Your Credit

If you already have excellent credit, then take the necessary steps to keep it in good standing. If you’re just starting to establish your credit, make sure you pay your credit cards on time. You should also try to pay more than the minimum payment as well. Even an extra $15 a month can save you thousands of dollars in interest. Your main goal should be to establish a pattern of using your cards and then paying them off in full the following month.

Be Honest About Your Spending

Most importantly, you need to be honest about your spending habits. If you have a bad habit of overspending when you go out, leave your credit and debit cards at home. Take just enough cash to cover what you plan on buying.

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