If there’s one thing they don’t teach you in college it’s how to manage your money. In fact, most college grads walk in their cap and gowns already owing about $20,000 or more in student loans. Add that to a couple of thousand they probably owe on their credit card and they’ve got some serious financial hurdles before they even find a job.
Once you find that first job out of college, it’s important to take a good look at your finances and make a budget. Most of you have probably been ignoring this word for quite some time (hell, most middle aged professionals do) but it’s really not as scary as it seems.
1. Calculate how much money you have coming in.
When I say to calculate your income, I mean ALL of your income. Regular paycheck and side hustle money included. Once you’ve got a clear picture of how much money you have coming in you can then start to see where it’s going.
Don’t fret if you’re not making that much, at this point in the game it’s about making our money work for you.
2. Make a list of your fixed expenses.
Now that you know where your money is coming from you have to figure out where its going. In other words, what bills do you pay every month? Include everything: credit card payments, student loan payments, gym memberships, Netflix, rent, cell phone, etc.
Compare your total costs to your income. How much money do you have left over? Instead of spending it, consider putting it into savings
3. Set up your savings plan.
Our generation has something really great going for it: online banks. Where as previous generations may be kind of scared of them, we should be embracing them for their lack of fees and higher interest. They also make it incredibly easy to set up multiple savings accounts.
To give you a idea, you should have at least 3 savings accounts: taxes, an emergency fund, and an account for what you need (down payment on a house, perhaps?) Once you have these set up you have to see how much of your checks can go into savings. For instance, 15% of every check I get (regardless of where it’s from) goes toward taxes, 20% goes toward purchasing a car, 10% toward my emergency fund, etc.
How you allocate your funds will mostly depend on how many fixed costs you have. Ultimately, just come up with something that works for your particular situation. And remember, when that check comes in make sure to put money in your savings accounts first.
The First Time Budget Template (Complete With Savings Plan and Credit Cards)
If you’re anything like me then you’re a visual learner, especially when it comes to numbers. Enter the Grad Meets World super awesome easy to use first time budget template.
Don’t get intimidated by all the different types of accounts (brokerage, IRA). I know that many of you are just starting out and may not have all of these set up yet. For now just think of them as reminders for your financial goals
Also, I used examples throughout the template so feel free to use your own information.
Click here to jump to the spreadsheet!
