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How to Budget Money After College

Graduation is right around the corner for some of us and that means we need to keep our bank accounts in order so we don’t find ourselves in stressful financial situations. Easier said than done, right? A special thanks to all those items that we don’t particularly need but somehow convince ourselves otherwise. Before you know it, your entire budget is off track.

Being a new grad can be scary, however, practicing good budgeting strategies will lead you in the right direction and will get you into good money-management habits so you can better handle your finances after college. It’s not as hard as you may think and it’s better to ration your cash now rather than later to save you trouble and headaches. Check out these 4 tips on how to budget your money after you graduate.


1. Manage Debt

Although you may not come straight out of college with a mountain of debt, you can’t forget about those student loans. Most loans have a six-month grace period, but as you know, six months can fly by. So, during this time, finding a job and knowing how much you owe is key so that you can start planning a monthly payment or begin considering payment options that work for you.

Try not to make late payments as that makes it harder to pay off your debt. “Make a list of your debt including the creditor, total amount of debt, monthly payment, and due date” says Latoya Irby, author of How to Manage Debt of Any Size. Keeping track of these things will help you refer to your spending and make updates.

2. Track your expenses

Map out where your money is going each month. Small, daily expenses like coffee or snacks can start to add up and throw off your budget. Let’s not forget about those Target trips when you leave the store with more than you planned. I’m guilty of it too. To avoid these surprise expenses, track them! Keep them in a notebook or collect receipts. Here are a few monthly bills that should be in your budget:

  • rent
  • utilities
  • gas/transportation
  • groceries
  • internet
  • phone 
  • insurance

Break down a month’s worth of expenses and the due dates to get a better look at the total amount you spend each month. If you get into this habit, you can review the numbers and look for ways to save.

3. Save for emergencies

Build an emergency fund. Don’t question it. Extra money in unpredictable times, like getting laid off or medical bills, will save you money in the long run. You won’t have to rely on credit cards or take out loans if you start saving as soon as you can. Climbing out of debt is already a challenge, so make it easier on yourself by saving money just for unexpected expenses.

You don’t have to put away large amounts of money at a time. A little each month can go a long way. “A good rule of thumb is to have enough to cover three to six months’ worth of living expenses,” says Spencer Tierney, author of Emergency Fund: What It Is and Where It Should Go. Set a monthly savings goal into your budget so you’ll be prepared. 

4. Plan for retirement

Invest in your future! Yes, you won’t be able to retire until decades from now, but getting a head start on investing money into a retirement plan after graduation is better than waiting 10 years from now. Why? Compound interest. It’s the best way to increase the value of your money over the long haul and you may be able to retire early. Starting in your 20s doesn’t sound so bad after all, does it?

At the end of the day, it’s up to you to decide if retirement is high on your list of priorities. Paying the rent is more important, but maybe consider skipping on a meal out or buying the latest smartphone. A little is certainly better than nothing. This way, you save money to make your retirement as comfortable and stress-free as it can be.


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