You’ve graduated! Finally, you can officially say you’re part of the “real world” and enjoy all the freedom that comes with it. Of course, that also means taking on all the responsibilities of being an adult, like learning about how insurance works if you rent and saving money each month. That’s why it’s important to learn how to balance a budget sooner rather than later. This doesn’t have to be a tedious or intimidating experience. With modern technology, making a budget is now easier than ever.
These key tips will help you get started:
1. Choose a Method and Start Budgeting
Many people think making a budget requires sitting in front of a table with a notebook, calculator, and a stack of bills, spending hours trying to determine whether how much you make is greater than how much you spend. That’s no longer necessary. There are plenty of reliable personal finance apps that make creating a budget a simple task. Research your options and choose which one seems best for your needs. Still, the goal is always to make sure you’re spending less than you’re making. Thus, you’ll need to calculate your monthly expenses. This includes bills, necessary purchases like groceries, and any money you set aside for savings. How you spend what’s left over is up to you.
2. Open Accounts
If you don’t already have a checking and/or savings account, open one of each. You might also want to sign up for a credit card. Yes, credit cards can be risky. Many people spend more than they can truly afford when they first open one up. However, if you’re disciplined about spending within your limits and paying off your balance every month, a starter credit card can help you build your credit. This will help you later when you’re trying to purchase a car or home.
3. Get Insured
Hopefully, your employer will provide health insurance. If they don’t, protect yourself by purchasing your own. You may also need other forms of insurance, depending on your lifestyle. Auto insurance, for example, will be necessary if you drive. You should also purchase renters insurance if you don’t own a home. It’s much more affordable than most people think, and can protect you from a variety of major financial problems. You can learn more on website like TenantCloud a property management system that offers you ability to manage your rental and much more, including insurance options.
4. Save Money
Recent grads are easily tempted to spend money on fun experiences. That’s fine, as long as you also remember that now is an important time to start saving. If your job lets you set aside part of your paycheck in a retirement account, take full advantage of it. If not, contact a financial specialist at your bank and discuss your options. Determine how much money you’ll have to set aside each paycheck to meet your long-term goals. Being disciplined about saving now will pay off significantly in the future. Again, budgeting doesn’t need to be that hard. The process will actually make this exciting period of life even more enjoyable. When you’re not stressed about money, it’s a lot easier to have fun.
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Contributed by Armand Levitz