It was only a couple of years ago that I graduated college and entered the workforce. It was a rewarding experience to finally take the knowledge I gathered from textbooks and lectures, and apply what I learned in the real world. While I was loving this new phase of being a young professional, one area that took getting used to was paying bills and managing my own finances. I quickly realized that if I wasn’t careful, my careless budgeting could get in the way of my future plans. To make sure there were not hurdles standing in my way, I discovered some easy ways to manage my money, and I’d like to share what I’ve found.
Set Up a Budget
I know, I know. This is the most annoying and redundant advice you can get, but nonetheless, it is the most important advice you can ever receive. Without a budget, it’s scarily simple to fall into bad spending habits. I’ve learned this first-hand. When I first graduated, the initial year out, I had no budget and would carelessly spend money on nights out with friends, trips, a concert here and there, and when it came time to pay my student loans, there was barely any money to round up and pay.
This struggle took a 180 degree turn the second I set up a budget. It gave me a visual to abide by, and put my poor spending habits into perspective. I then saw when my bills (student loans, phone bill, personal trainer at my gym, etc.) were due. More importantly, it showed me if I had any money left to save and where I could cut back. Even with a bare minimum budget, you can save hundreds of dollars a month while still fulfilling your financial obligations.
Two Savings Accounts
Have you ever dipped into your savings account to buy something you really didn’t need? I’ve been guilty of doing it, myself. That is why setting up two savings accounts has been a minor miracle for managing my money. Originally, I opened a savings account specifically for travelling to California. It has now become an account where I deposit at least $10 a week, for future short-term savings goals. I have separate savings account for more long-term goals (like saving to buy a home) and I try never to withdraw funds from there.
The transition years between graduation and being in prime adulthood can be nerve-wracking. You’re probably constantly thinking what steps you should take to set yourself up for future success. One of the most important things you can do is establish good credit. Good credit will help you negotiate every big financial decision you will ever make for the rest of your life. I personally wish I started focusing on raising my credit score early on. How do you do that, you ask? First off, make sure you pay your student loans on time. Every. Single. Payment. I’m guilty of being a week or two behind when the envelopes first started coming in the mail. To keep myself on track, I set up electronic payment so my payment was automatically withdrawn from my checking account on the same date every month. I didn’t even have to think about it, I just had to make sure I had sufficient funds in my account (which your budget will help you manage, wink wink).
Another great tip, is heading to a credit union and getting yourself a credit card, if you don’t already have one. You don’t need a credit card with a high limit. Get something small, and pay your bill in full (and on time) every month. And remember, credit cards build credit, debit cards don’t.
Like a typical Millennial, I wouldn’t know where I’d be without apps. They have become an essential tool to managing my finances. Here are some of the key apps you can use:
Your Bank/Credit Union’s mobile app- The first app I downloaded (and the one I recommend first for you) is the app from your financial institution. There isn’t a day that goes by when I do not check my balance in my accounts. I do so to make sure I’m never over-drawn or there wasn’t suspicious activity. Depending on your bank, you may also be able to utilize P2P payments, mobile deposits, and several other perks worth looking into.
Digit- To me, the easiest way to save is when you don’t even know you’re saving. That’s part of what makes Digit so successful. The app analyzes your income and spending habits and puts an estimated about of money, for me it’s around $10 every couple of days, into your Digit account. Please note that Digit has a 100 day free trial and then a $2.99 monthly fee after that. To me, it’s money well spent.
Mint- The perfect companion app to Digit, I have found in my saving exploits, is Mint. The app lays out every purchase you make from a new car to a cup of coffee, and then uses comprehensive graphics to lay out your purchases. Based on your spending, Mint will set up a budget for you, which you can then use to set up a spending limit. When you come close to hitting your spending limit, you will receive an (stern) alert telling you to cool your spending habits. I’ve come close to my limit a couple (more than a couple) times but because of the budget I’ve set up, I still saved money that month. My bills are also always paid on time because I’ve set up notifications for when my bills are coming due.
HelloFresh- Are you in a situation where you aren’t living with mom and dad who supply food to you? If you have a busy schedule, you might be caught in the trap of buying breakfast, lunch, and dinner for yourself. Besides it not being particularly healthy, it can cost over a hundred dollars a week if you’re not careful. Thanks to my love of podcasts, I’ve heard about HelloFresh and decided to give it a shot. For $59.94/week, you receive ingredients and recipes for 3 meals that each serve 2 people. The meals have been delicious and now I only need grab the basics at the grocery store. Also, try to find coupon codes and refer friends for discounted pricing.
GasBuddy- For years, I’ve only filled my gas tank when I was near empty, and because of that I always had to go to whatever gas station was closest. It always seemed to be the most expensive station in the town as well. With GasBuddy, I’m able to see the price of every gas station in the area and plan my gas station trips to whatever gas station is the most inexpensive, thus saving me some serious dough each month.
To see other blogs from the Align Credit Union Team, visit our blog page here.
Social Media Coordinator, Align Credit Union