If you’re a new college graduate who has found work and is starting to live the life you imagined, congratulations! Shifting from studies to a career is the stepping stone for improving your quality of life as you work toward all your dreams.
Living on your own during college may have trained you to budget your finances, but having a secured payment that comes every two weeks is a different challenge to overcome. Changing from a student to an office worker will also bring new trials when it comes to finances. You’ll have new bills with different payment schedules or new types of expenses you didn’t have when you were a student. All these can be overwhelming without proper guidance.
Let us help you manage your way through this new adulting phase. Knowing how to manage the income that you get is one skill you should learn to maintain a good and stress-free life. Budgeting is particularly crucial amid the ongoing coronavirus pandemic, given the uncertainties that it presents to workers and businesses worldwide.
Here are some budgeting tips you should keep in mind:
1. List down your necessities
Start with the most important items. These are the non-negotiables that need to be on top of your expenses pyramid. These include your housing expenses, health insurance, transportation costs, monthly grocery or food budget, and payment for the internet. Other items you spend on daily that are not essential should go on a different list.
Now, if you find that your necessities take up too much of your income that there is nothing left for fun and miscellaneous expenses, you can make the necessary adjustments. For example, you can try to look for a new apartment within the same rent budget as you have now or lower. Make sure it is located near your workplace so that you can save up on your transportation budget.
Paying your needs first is one of the best advice for securing finances you should live by.
Important Note: When budgeting, keep in mind that you should cut the tax and loans you need to pay from your bi-weekly paycheck. Start your budgeting using the base pay you receive.
2. Be mindful of the timing
After listing down all your expenses, the next thing you need to watch out for is the payment timing. Since bills have different billing periods and due dates, some of these dues need to get paid before you get your paycheck.
As a responsible adult, you need to leave money from your previous pay to settle these bills on time. Keep track of what you need to pay and when, and this strategy will prevent you from overstretching your budget.
3. Have a savings goal
You can’t rely on living paycheck to paycheck forever. You also need to start saving money for rainy days. There’s no need to put pressure on yourself when it comes to savings, especially since you are just starting. Starting small is always better than nothing at all.
You can start by having a goal. How much do you want to save in a year? Break that amount to 12 months and see how much you need to save per month to reach your goal. You can always add more to your savings if you have extra money you didn’t spend. Likewise, it is always helpful to have a separate fund for emergencies. The current pandemic has resulted in many people losing their jobs, so it’s best to be prepared.
If you do well on this part, you can expand into having retirement savings later on if you want to have enough money and retire early.
4. Review your expenses
It’s also important to track your expenses from time to time. Having a monthly review can help you see where your money goes or which items you spend most on. Having an overview and monthly comparisons will make you understand where you need to adjust if you want to improve how you secure your finances.
When you have your source of income, it can trigger you into dreaming and buying new things to improve your lifestyle. There is nothing wrong with investing in yourself as long as you know your limit. Since you are a beginner on this journey, it will help if you start small and move according to your income. Keep track of your income and expenses and start saving up until you have enough money to buy everything you want. Talking to financial experts will also help you manage your finances better.
Check out our website for more information about the importance of financial literacy in banking! Follow us on our journey by joining our app wait-list below 😄