You’ve finished school and you’re finally out on your own. Sure, you had a part-time job as a student, but really you were financially supported by your parents (or maybe even student loans for college). To some extent, that requires you to learn money-management. But your financial situation was probably never truly dire.
Now, though, things are different. You are solely responsible for all your bills and you seem to have more of them than ever before.
Here are some ways to give yourself the best shot at staying above water.
1. Create a budget
It’s way too easy to think you’re doing ok so long as no checks bounce. In theory that may be true. What that means, though, is that you don’t know where your money is going, you can’t save up for emergencies, and you can’t save up for something you really want that might be a little pricier.
When you have a budget, you’re in total control of where your money is going. We’re not saying to not spend on anything unnecessary. Just make sure you know how it’s affecting your bottom line and make the choice to do it.
2. Limit your credit-card use
Credit cards are a necessary evil. They do help you build your credit score which is crucial to getting a mortgage or a car loan down the road. But they put you at risk for a dangerous slippery slope. It’s a piece of cake to charge things and only pay the minimum payment.
Sometimes life throws you curveballs and you have to carry a balance for a while. When you make a habit of it, though, you will likely find yourself in a tight financial place down the road.
3. Start a savings account
Many people just starting out feel they aren’t in a position to start a savings account or retirement fund. It makes sense to think that way. Maybe your first job barely pays the rent. Maybe you’re working three jobs just to make ends meet. But if you’re making a budget and sticking to it, you likely have a little money left over.
Even if it’s just ten bucks, put that into a savings account. Play it by ear if you need to at first. But make sure you are putting something back. That money will add up and the habit you’re forming will benefit you greatly when you have an unexpected expense or when you’re ready to make a down payment on a house. Don’t focus much now on how much you’re saving. Just make sure you are.
Financial problems are one of the leading causes of stress for people of all ages. When you’ve just started out on your own, it can keep you up at night and wear you down with worry. These three steps sound simple but require a lot of self-control and dedication to maintain. If you stick to them, though, you’ll find yourself on stable ground and as your career grows, so will your financial security.