Graduation is just around the corner and before you know it you could be faced with some tough financial decisions. Learning how to manage your finances for the first time can be a hard task to deal with especially if you don’t have a whole lot of experience managing finances. Check out these personal finance basics to get you ready for the next phase in your life.
• Track your Spending
Start at the beginning of the month and track your expenses to get an idea of what you spend. Your budget doesn’t have to track every dollar but have a basic idea of what money you have coming in and going out every month. This process will help you start making a realistic budget including your rent, utilities, groceries, gas, etc.
• Make a Budget and Follow It
You need to have a plan in place to keep everything in order, or you’ll find yourself falling behind fast. An easy way to keep within your budget is with the “envelope system”. Have separate envelopes for each budget that you have set for the month such as groceries, gas, entertainment, etc. This way when you visually see the money, you know exactly what you have left; and when an envelope is empty, you are done spending for the month for that category.
• Make Savings Part of your Monthly Budget
Always make sure to include money that will go into savings each month in your budget. An automatic transfer is the best way to make sure that you are putting money away each month. If you find it too easy to transfer money out of your savings account, open a savings account at a different bank or credit union. That way you will not see how much money you have in that account and it isn’t as convenient to withdraw.
• Build Credit
Getting a credit card is never a bad idea when it comes to establishing credit. There are several credit cards out there, it’s just finding the right one that can be challenging. To help save you time and stress, check out MyCreditCardMatch.com. This quick and secure site will help you find a credit card that fits your needs and lifestyle.
• Minimize Student Debt
For many students it gets very tempting to take out as many student loans as possible so you can live off that money. It’s important to keep in mind that the additional money you take out, will take you that much longer to pay back after graduation (and will cost you more with the additional interest). Some tips for managing your finances in college are to borrow wisely when it comes to loans, think about getting a part-time job to pay for rent/utilities. Also, it’s a great idea to funnel extra money, such as your tax return, towards your student loans to get them paid down sooner.
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