Whether you’ve just graduated from college or you’ve gone straight into the workforce after high school, learn how to create and manage a budget and make the most out of your new income with the help of Landmark National Bank.
Create a Budget and Stick To It
Setting yourself up for success starts with determining how you’ll spend your money each month. From rent to utilities to gas to get you to work, you may be facing a few new expenses you haven’t had to cover in the past. While it may be tempting to spend your hard-earned new income on gadgets, tech, eating out, or clothing, remember to set up a budget to make sure you’re not spending more than you’re bringing home. These steps will help you learn how to budget after landing your first job.
Start With Fixed Bills
A majority of your bills will show up every month including rent, car payment, student loans, phone, internet, and more. Start with these as you know they likely won’t go away or change anytime soon. In addition to fixed bills, set aside a bit of money each month for emergency expenses should they arise.
Add Variable Expenses
Additional expenses include groceries, eating out, entertainment, and other expenses that may occur some months and likely change from one month to the next. You can’t cut back on how much you spend on rent or utilities, but you can — and should — tighten your entertainment budget if you find you’re running out of money each month.
Stick To the Budget You Set
If you create a budget but don’t stick to the parameters you’ve set, you’ve defeated the purpose of a budget. Creating a budget itself is easy, but the habit of budgeting takes time to build up and stick to. One of the best ways to see if your budget is working for you is to track your spending habits each month.
Track Your Spending Habits
If you’re making money and spending money, you should be tracking it. Tracking your spending habits is essential to make sure you’re sticking to the budget you’ve created. Tracking your spending is critical if your income is irregular, and you’re not sure what each paycheck will look like.
Whether it’s weekly, every other week, or even monthly, take time to sit down and make sure your expenses are accounted for. Even if your paycheck is the same each pay period, tracking your spending ensure your budget isn’t off. It also allows you to adjust your budget if you notice you’re spending too much to be sustainable. You can track your spending in several ways:
- Keeping notes with pencil and paper
- Using an app
- Separating money into envelopes each month
Monitor Your Credit
While owning and using a credit card can help you build up credit for future purchases such as a car or house, it’s important that you pay it off each month and don’t use it to make purchases you can’t afford.
If you have a large amount of high-interest debit, make paying your credit off a priority. Having a credit card will help you build your credit score, but if you’re missing payments, forget about a closed account, or take on too much debt, your credit score will take a hit.
Stay on top of your spending habits and once you’ve started building credit, stay on top of monitoring it. You can either pay for a credit monitoring service or take advantage of free tools through your credit card company, depending on the brand.
Monitoring your credit has an additional advantage; if you or a credit monitoring service notice unusual purchases or inquiries on your account, someone may be trying to steal your identity.
Set Financial Goals
Whether you’re saving up for that pair of shoes you’ve been eyeing for months, or have been putting away money for a house for years, it’s important to set financial goals for yourself. Just as you have in the past with goals you set growing up, make sure the financial goals you set for yourself are SMART:
- Time bound
Take the time to write down the financial goals you set, create an action plan, and then work to achieve them.
If you’re not sure what goals you should set, start small by challenging yourself to save a certain amount of money each month or pay off a set amount of debit. Financial goals for college graduates will look different from financial goals set by those who have been in the workforce for 10+ years. Just as your career and life goals change, your financial goals will too and that’s okay! Take a look at the goals you’ve set every few months and adjust as needed.
Grow Your Savings
According to NerdWallet, experts suggest saving between 10% and 20% of your paycheck each month — however that’s not a golden rule. Some people have the ability to add more to their savings each month and pay off debt, while others are only able to cover basic expenses.
If this is your first experience with building a savings account, don’t be discouraged if you have to start small. Something as simple as saving $10 a week can add up to $520 a year. Learning how to practice saving money is an especially valuable skill for students and recent graduates.
Manage Your Money With Landmark National Bank
As you begin to navigate your new lifestyle as a young professional, find a financial service that offers products and services that fit your financial needs. Landmark National Bank has you covered with friendly and professional banking services. Find the resources you need including personal checking accounts, investment accounts, online & mobile banking, and more.
Start your career on the right foot; find a Landmark National Bank branch location near you today!