When you’ve graduated college, you’ve got a whole new kind of culture shock waiting for you. After all, even if you worked through school, most students aren’t receiving an adult-level paycheck, much less managing all the finances an adult has to juggle. Sure, you started forming a credit score and have a bank account, credit card, and some student loans that will start haunting you soon enough. But you haven’t dived into the deep end of the pool that is personal finance just yet.
For many recent college graduates, one particular concept can’t be ignored: learning how to save money as a college graduate. No matter how much money you’re making in your first adult job, and regardless of what financial goals you’re working towards, you’ll want to create an emergency fund and other savings goals, often planning significant savings for the first time.
1. Create and stick to a budget that works for you.
In the modern age, you’ll most often find that digital budgeting apps are the go-to option for those trying to take control of their finances. Take some time to consider which app—such as PocketGuard, You Need a Budget (YNAB), or Intuit’s Mint— is the right fit for you. Or, make your job a little easier by seeking out the best budgeting app in Canada (or your particular location) and giving it a try before diving into too much customization. In most cases, budget apps offer a free version or trial, giving you a chance to try it before committing to one platform. Then, you can decide whether that’s the best budget app for you specifically. You might get lucky and find that the highly recommended budget app you try first happens to be the best one for you as a new college graduate! If you’d prefer not to learn a new app or pay a subscription fee for full versions of some, you could also track your financial accounts in a spreadsheet or pen-and-paper budget.
2. Be content with stepping stones towards your dream life.
Now that you’ve finished your schooling, you’re likely excited to start creating the grown-up life you’ve been dreaming of since childhood. Save for that pesky student loan debt, you have newfound cash flow and can determine for yourself the best way to spend your money at any given moment. However, you mustn’t move directly from one lifestyle to the next. As a college student, you were presumably working with an incredibly tight budget, one you’ll be excited to leave behind with the new funds your new job brings. Still, you’d be better off taking small steps towards the lifestyle you’re dreaming of. As you create your budget, savings plan, and other financial goals, consider living below your means, at least at first. In this way, you’ll be able to save more money and make more progress toward your chosen goal.
3. Start a side hustle if you start to struggle.
Sometimes, despite your best efforts, you’ll still struggle with saving money. Depending on your income and expenses, you could very well find there’s just not enough money to go around. Hopefully, your budget is already offering a spending plan that minimizes your expenses where possible. When you can’t cut your costs, though, you have another option: increasing your income. By starting a side hustle, you’ll earn money beyond your salary, leaving you a bit more wiggle room as you perfect your post-grad budget.
After college, you’ll have many new projects to manage—after all, adulthood involves a lot of work! Managing your money and, more specifically, saving money doesn’t have to be a challenge. With these three concepts in mind, you’ll have an extensive adult budget and ample emergency fund to help you manage your brand-new life.
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