Five Essential Tips to Manage Your Finances: Receiving the first salary after graduating from college can be almost as exhilarating for recent graduates as receiving the diploma itself.
But it also poses a problem: How should those monies be managed in light of the numerous demands on a young person’s budget?
For this year’s college grads to properly start their financial life, we asked five money gurus to provide their best personal finance tips. They stated the following.
Five Essential Tips to Manage Your Finances
1. Choose your spending strategy.
According to Erin Lowry, author of the Broke Millennial Workbook, it is more effective to sit down with a pen and paper to work out how to divide your money among needs, wants, and everything else rather than adhering to the most recent TikTok budgeting craze.
Write down your major expenses, she advises.
You can then determine what non-essentials also fit after taking into consideration major expenditures like rent, car payments, and food.
You might wish to adopt a dog, go out to dinner with friends, or buy new business clothes, suggests Ms Lowry.
According to her, creating a budget in writing will help you determine what you can afford and when.
“We view budgets as stifling regulations that prevent us from having fun, but you should view them as a means of exercising control over how your money is spent. If you don’t know, all of your control has been lost, Ms Lowry warns.
2. Save wisely: Five Essential Tips to Manage Your Finances
Alex Rezzo, a licenced financial advisor and the founder of Andante Financial in Los Angeles, advises recent grads to begin saving for retirement as soon as possible, even if they are paying off debt.
Even though, in his words, “there will always be a more immediate excuse to delay saving for retirement,” he advises people to find a means to save at least 1% of their income and to gradually increase that amount over time.
Additionally, he advises keeping your salary direct deposits in an online bank that has a competitive high-yield account.
In this approach, the money could generate more income than it would if it were held in a checking or savings account at a conventional bank.
3. Defend your credit.
Making at least the minimum payments on your credit card and student loan accounts will help to safeguard your credit as you establish your own financial life.
Missing a payment, according to Ms Lowry, might lower your credit score.
She advises concentrating on paying off any debt with a high-interest rate first to lower the overall amount that is spent on interest.
To make it far more difficult for identity thieves to apply for new credit in your name, Ms Lowry also advises freezing or locking your credit.
You should keep in mind that if you freeze your credit, you will also need to unfreeze it if you wish to apply for credit on your own. She continues, “You might want to wait until you’re through a period when you’re applying for new accounts.”
5 Simple Personal Finance Hacks for Effective Budgeting: Boost Your Savings
4. Make errors and gain knowledge from them: Five Essential Tips to Manage Your Finances
Financial services provider Acorns’ chief education officer, Kennedy Reynolds, believes mistakes, like overspending or racking up credit card debt, are inevitable during the learning process. The important thing is to take something away from the experience.
Take that pay cheque and divide it up towards those debts until they are paid off if you have a debt to pay off, she advises.
Try to envision yourself in the future and be aware that the decisions you make now will affect you long-term, she advises.
5. Beyond your paycheck, take a look
Children’s online learning platform Outschool employs personal finance instructor Linda Whiteman to instil entrepreneurial thinking in her students. She explains that the majority of millionaires are business entrepreneurs.
“You don’t have to work for someone,” she asserts. She challenges her students to think about what they can teach others, whether it’s through online piano instruction or digital art.
According to her, pursuing alternative sources of income besides a paycheck can aid in increasing wealth.
Financial educator Melissa Jean-Baptiste found success by doing just that. She leveraged her prior teaching skills to produce and market lesson plans online.
I was making $10,000 a year, which I could use to pay off debt, she claims.
Her lesson plans eventually evolved into the current financial literacy enterprise that she runs.
She asserts that earning additional revenue outside of a paycheck “can be a game-changer”—financial advice that is relevant to all ages.
