Recently Graduated With a New Job? Time to Budget Like a Rock Star
September 23, 2021
You have reached financial independence and can now spend money on the things you want. But with this freedom comes questions such as, “Where is all my money going each month?” and “How much should I save?” Creating a budget can help answer these questions and provide a financial framework to help you achieve your goals. Here’s how to get started.
Establish a budget
Having a budget helps establish a structure so you know where you stand with your money. To create a budget, list your expenses in categories, such as rent, transportation, subscriptions (like Spotify or Netflix), groceries, medical, debt payments, and entertainment. Then set spending goals for each category while being honest with yourself about your lifestyle. For example, if you enjoy eating out a few times a week, include that amount in the budget.
Once you have your expenses totaled, subtract them from your net monthly income. Based on the results, you can identify areas where you may want to reduce spending.
Getting on the right financial track is a great goal, but having specific objectives to work toward will help you stay diligent and consistent with budgeting. Possible goals include saving for a new couch or car, paying off debt, or adding to your retirement fund.
No matter what your salary is, you should start saving; the more you save, the more you’ll earn in dividends. Start with a savings account, and don’t forget to start a separate retirement savings plan. If your employer offers a retirement plan with matching contributions, make sure to deposit enough to qualify for the match — it’s like getting free money.
It’s also good practice to start a savings account for emergencies. Expenses you can’t budget for, such as car repairs and medical costs, can throw off your budget, so having an emergency fund for those costs helps you stay on track.
Go debt free
Paying off debt is much easier with a budget. By making monthly payments and cutting back on other expenses, you can reduce your debt sooner.
Check with your financial institution to find products to help you save faster and digital services to help you monitor your accounts. MSUFCU offers its Savings Buildersm account, which pays more on initial deposits. MSUFCU’s Mobile app allows members to set up alerts to help monitor their accounts. These tools, along with your budget, will allow you to identify areas where you can spend less. It can also help you reach one or more of the financial goals you have established.
Tags: Budgeting, Savings, Retirement