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Congrats on your success. You deserve to splurge & enjoy yourself. About finances, here's what I did when I started my first job:
1. Consult someone at your bank about your retirement & financial planning. Some banks have advisors & they offer these services for free. They will help you plan your finances & retirement.
2. Save 8-10% of your paycheck in traditional savings account. Keep a separate emergency fund for unexpected expenses.
3. Sign up for a 401k or Roth IRA account & keep investing even if there are recessions
4. Budget all your expenses, savings & give yourself allowance every month for shopping, entertainment
5. Dont hang out with people who live beyond their means as you will compete with them & overspend. Find friends who are in same situation as yourself.
6. Start saving for a house. More downpayment you have, less mortgage & interest you will have to pay
7. Travel once or twice a year. After you get married & have kids, you will wish you had travelled to your favorite destinations while you were still single. Save some money every month for travel & plan ahead.
Fun doesn't have to be expensive. If you like designer clothes, check out the consignment stores for cheap bargains. You can even sell your gently used designer clothes, hand bags from last season at these stores. Shop at outlet malls & sign up for rewards, emails, coupons from your favorite stores. Try shopping at Ross, Marshalls as they have designer stuff on cheaper prices. Find local entertainment that are free like festivals, meetup groups, etc. & invest in some healthy hobbies. Surround yourself with people who are successful like you & talk to them about future plans, finances, budgeting.
Hey everyone! I am 21 years old, graduated college in April, and 3 months ago I was very fortunate to obtain a full-time, full benefits job in my field. It is a great paying job, in the medical field and I am definitely not used to making this great of money as I have worked as a waitress throughout college. I am still living with my mother while I plan to move out in about 8 months,. My problem is now I can't stop spending my money when I get paid, haha.. Throughout college I had to be extremely frugal and basically never bought anything nice for myself. I think it is because I am now making great money and have never really owned nice things. For example, I went through school with the most basic phone while everyone had a smart phone of some sort. Well I finally was able to get an iphone when I got my job. Also, I spontaneously just bought an ipad mini. -_-; And I bought a bunch of clothes at expensive stores. All in one day. Its especially hard when I'm out with my friends. I am always able to pay my bills though. Other than rent, food, phone bill, and car insurance, I have no other bills. I still own my reliable little 1998 Corolla, its a good little gas saver (32 mpg) that I plan to use until it wont run anymore, so no car payment. I have cushion money in a savings account but definitely not as much as I should have in savings for how much I've worked/made by now. Ugh.
So is this normal to feel the urge to spend and spoil yourself at first when you get that good job out of college? Or do I have a problem/should the desire to spend a lot be gone by 3 months? I cant help but feel guilty when I spend though. Any tips on how to start saving better? Thanks!
Well, it's normal -- but it's not good practice. :-) Look at how many professional athletes blow their millions of dollars and have nothing a couple of years after their professional career dies. That's you, right now, on a smaller scale.
1. Pay yourself first. Have money taken out of your paycheck before you even get it to go into a savings account, retirement account, etc.
2. Make a budget. if your parents aren't good with money/budgets, go to a free to low cost credit counseling class or money management class. I am partial to the Dave Ramsey Financial Peace University program (see DaveRamsey.com) but there are many others out there. You may also want to talk to a financial planner -- you have no debts right now, you are in a perfect position to organize your finances so that you could retire by the time you are 50 if you are aggressive with your savings and investing.
3. Pay CASH for everything. If you are going shopping, take a certain amount of money -- say, $100 -- and when it's gone, you're done. You can buy a pair of shoes, make-up, a blouse, a Starbucks coffee, etc. and satisfy the social aspect of shopping without breaking the bank.
4. If you have a credit card, put it on ice. Literally. If you can't stop using it, then put it in a ZipLock bag, fill the bag with ice, and freeze it. It's there if you need it -- but it's not available for the impulse purchases, which spells doom to budgets.
5. Have a goal. It's much easier to save if you have a goal. Do you want to buy a house or a condo down the road? Start putting the money aside, aggressively. For example, if a decent condo in your area is $150,000, try to save $40,000 (20% down, some closing costs and furniture :-) Your car may be doing well, now, but it's on borrowed time. Start putting money aside to be able to pay cash for a good used car in a couple of years. Life without a car payment is a wonderful thing. :-) Start putting money aside in a wedding/honeymoon fund -- even though you may not have any plans to get married, yet. Whatever your goal is, set it and work it.
Stop sacrificing long term goals for short term satisfaction. You've gotten some toys. Enjoy them. But now it's time to stop the wish-fulfillment behavior and start acting like a financially responsible adult.
Well, it's normal -- but it's not good practice. :-) Look at how many professional athletes blow their millions of dollars and have nothing a couple of years after their professional career dies. That's you, right now, on a smaller scale.
1. Pay yourself first. Have money taken out of your paycheck before you even get it to go into a savings account, retirement account, etc.
2. Make a budget. if your parents aren't good with money/budgets, go to a free to low cost credit counseling class or money management class. I am partial to the Dave Ramsey Financial Peace University program (see DaveRamsey.com) but there are many others out there. You may also want to talk to a financial planner -- you have no debts right now, you are in a perfect position to organize your finances so that you could retire by the time you are 50 if you are aggressive with your savings and investing.
3. Pay CASH for everything. If you are going shopping, take a certain amount of money -- say, $100 -- and when it's gone, you're done. You can buy a pair of shoes, make-up, a blouse, a Starbucks coffee, etc. and satisfy the social aspect of shopping without breaking the bank.
4. If you have a credit card, put it on ice. Literally. If you can't stop using it, then put it in a ZipLock bag, fill the bag with ice, and freeze it. It's there if you need it -- but it's not available for the impulse purchases, which spells doom to budgets.
5. Have a goal. It's much easier to save if you have a goal. Do you want to buy a house or a condo down the road? Start putting the money aside, aggressively. For example, if a decent condo in your area is $150,000, try to save $40,000 (20% down, some closing costs and furniture :-) Your car may be doing well, now, but it's on borrowed time. Start putting money aside to be able to pay cash for a good used car in a couple of years. Life without a car payment is a wonderful thing. :-) Start putting money aside in a wedding/honeymoon fund -- even though you may not have any plans to get married, yet. Whatever your goal is, set it and work it.
Stop sacrificing long term goals for short term satisfaction. You've gotten some toys. Enjoy them. But now it's time to stop the wish-fulfillment behavior and start acting like a financially responsible adult.
Is that you Dave Ramsey? The only reason it makes sense to pay cash for everything is if you really can't control your spending. There is no reason not to use a credit card to build credit and get free money (rewards) if you are responsible with your spending. CCs also offer a variety of protections. I once dropped and broke a new computer and my CC paid to have it replaced because they provide protective insurance on products purchased within a certain # of days.
Is that you Dave Ramsey? The only reason it makes sense to pay cash for everything is if you really can't control your spending. There is no reason not to use a credit card to build credit and get free money (rewards) if you are responsible with your spending. CCs also offer a variety of protections. I once dropped and broke a new computer and my CC paid to have it replaced because they provide protective insurance on products purchased within a certain # of days.
The bolded ^^^ is the key to your theory. OP has not proven that yet.
Hey everyone! I am 21 years old, graduated college in April, and 3 months ago I was very fortunate to obtain a full-time, full benefits job in my field. It is a great paying job, in the medical field and I am definitely not used to making this great of money as I have worked as a waitress throughout college. I am still living with my mother while I plan to move out in about 8 months,. My problem is now I can't stop spending my money when I get paid, haha.. Throughout college I had to be extremely frugal and basically never bought anything nice for myself. I think it is because I am now making great money and have never really owned nice things. For example, I went through school with the most basic phone while everyone had a smart phone of some sort. Well I finally was able to get an iphone when I got my job. Also, I spontaneously just bought an ipad mini. -_-; And I bought a bunch of clothes at expensive stores. All in one day. Its especially hard when I'm out with my friends. I am always able to pay my bills though. Other than rent, food, phone bill, and car insurance, I have no other bills. I still own my reliable little 1998 Corolla, its a good little gas saver (32 mpg) that I plan to use until it wont run anymore, so no car payment. I have cushion money in a savings account but definitely not as much as I should have in savings for how much I've worked/made by now. Ugh.
So is this normal to feel the urge to spend and spoil yourself at first when you get that good job out of college? Or do I have a problem/should the desire to spend a lot be gone by 3 months? I cant help but feel guilty when I spend though. Any tips on how to start saving better? Thanks!
Do you mind me asking what field you went into? I know so many people who graduated and can't even get a job. So it would be interesting to hear what your degree is in?
Congrats on your success. You deserve to splurge & enjoy yourself. About finances, here's what I did when I started my first job:
1. Consult someone at your bank about your retirement & financial planning. Some banks have advisors & they offer these services for free. They will help you plan your finances & retirement.
2. Save 8-10% of your paycheck in traditional savings account. Keep a separate emergency fund for unexpected expenses.
3. Sign up for a 401k or Roth IRA account & keep investing even if there are recessions
4. Budget all your expenses, savings & give yourself allowance every month for shopping, entertainment
5. Dont hang out with people who live beyond their means as you will compete with them & overspend. Find friends who are in same situation as yourself.
6. Start saving for a house. More downpayment you have, less mortgage & interest you will have to pay
7. Travel once or twice a year. After you get married & have kids, you will wish you had travelled to your favorite destinations while you were still single. Save some money every month for travel & plan ahead.
Fun doesn't have to be expensive. If you like designer clothes, check out the consignment stores for cheap bargains. You can even sell your gently used designer clothes, hand bags from last season at these stores. Shop at outlet malls & sign up for rewards, emails, coupons from your favorite stores. Try shopping at Ross, Marshalls as they have designer stuff on cheaper prices. Find local entertainment that are free like festivals, meetup groups, etc. & invest in some healthy hobbies. Surround yourself with people who are successful like you & talk to them about future plans, finances, budgeting.
What she said, but get out of debt first. If you have no student loans, you are the exception, not the rule. You will never be free as long as you are in debt. Never carry a credit card balance. Pay it off, then make monthly payments into a savings account for things you would normally put on a credit card.
Money is a tool. If you squander it, it is just like throwing a tool in the mud and leaving it there. I once saved my shekels and took a 3 month European vacation. It was paid for in advance, through a lot of hard work and frugal living, with enough left over when I got back to put a down payment on a starter home.
You can either manage your money of be a slave to it.
Things like iPads and iPhones are actually very small purchases in the grand scheme of things compared to other financial decisions like car and housing and food. If you don't have a car payment, you don't live in extravagant housing, and you don't eat out all the time, then treat yourself to nice things a couple of times per year. But if you are single and working, now is the time to save massive amounts of money. Live with room mates and cook your own meals. Once a wife and kids come along, your monthly expenses may go up by an order of magnitude.
Half the battle is realizing there is a problem and then figuring out options...
Are you contributing the max to any employer plans or if none are offered... a private IRA?
This is money you will not see which may be enough to turn the tide.
My first paying job with Social Security withholding was at age 12... I made $50 a week.
Of that $50, 20 went to my folks for room and board, 20 to my savings... a few dollars to taxes/withholding and a little more than $6 was all mine which I did spend on lunch for the week...
It taught me to be frugal and maybe why I could buy a home right out of college just before I was 23...
To this day I don't have a personal cell or every lived in a home with cable... I just abhor reoccurring monthly expenses...
I don't get everyone saying "You deserve to spoil yourself now and then"
That's a bad mindset to get in. Do or buy things because you *really* want to. Not just because you "deserve" to.
I'll be 25 next month and have over $80k saved between mutual funds, IRA's and 401k plans. And I don't have a "formal" budget to speak of.
What I do is easy:
I automatically take 10% of my salary and put it into a 401k (7% pre-tax, 3% roth).
Auto deduct $1,200 per month from my checking account into a high interest savings account. $5500 of this at the end of the year gets put into a roth IRA. The rest into market cap mutual funds.
After my key expenses (Rent, Gas, Food, Insurance, Utilities), I have around $500 left over. If I spend it, cool. If I don't, I don't. Most months I don't go anywhere near it that $500 mark. Maybe $200. Some months, I want to go on vacation and may spend $700. At the end of the year, anything over $2,500 in my checking account gets put into those market cap mutual funds, and I start over again.
I leave around $2,500 in my checking account because that's about 2-month's expenses and enough that if I needed emergency cash, I can without having to transfer out of mutual funds.
Best advice I have. Say you want something. Like that iPad. Look at it. Play with it. Go home. Wait 2-3 days. Still want it? Buy it. Moved on to something else? Repeat the process.
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