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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.
I agree with this and I use this tactic myself. Clothes are my weakness, personally. If I see something I think I just HAVE to have I'll try it on and make sure it looks good (often it doesn't and I'm done right there). If it looks good I still leave the store to contemplate. If I'm still thinking about it several days later, I'll buy it. It's a good system and I've avoided a lot of bad purchases that way.
Yes if you went to college on a very tight budget, and did not grow up with much money, it is totally natural to want to go out and spend your money on the stuff you deprived yourself of for all those years, and despite what everybody else is telling you 3 months is not a big deal, as long as you are not running up credit card debt and getting into contracts that you cannot really afford than you will be fine. .
Now that you are realizing that you are being irresponsible you can start taking the steps to get yourself straightened out.
Here is what I wish all young people would do with their 1st real job.
Figure out what the average rent for a 1 bedroom apartment is in your area, start having that amount auto drafted out of your account on the 1st of every month, you are living with your mom and probably paying a minimal rent, so between the 2 of them you will have the opportunity to build a nice emergency fund while getting used to what it is going to cost for rent and utilities when you do move out on your own.
On top of that max out your retirement account if you are eligible and make sure to talk to your retirement account rep to figure out what accounts you are comfortable with, if you are not yet eligible for the retirement than start saving 10-15% of every paycheck also have that auto drafted preferably to a different savings account than your emergency fund. Take some time to learn a little about investing in retirement accounts, and talk to several different financial advisers and than when you have some money built up you can start investing the money responsibly.
Then you need to figure out a budget on what you have left, actually figure out what you need for food and your other bills, than plan to enjoy the rest of the money. I am guessing you should have enough to buy and outfit or two, go out a few times with you friends every month, and even buy something you really want or need and not have to feel guilty.
I agree but I would add in first payback for any loans (credit cards, student loans, car) you took out before the average rent. The debt that we tack on in college is typically what hurts young people first because as soon as you stop school, the loans creep in. These loans are crippling and take away most of your throwaway money. I would also then put transportation above that. Whether is by car or public transportation, you NEED to get to and from work. If you don't show up because you don't have gas or a bus card with money on the account, you don't get paid to pay off your loans, your rent, your retirement, your food, your other bills and anything else.
I find when you get you first job, you spend the first two or so paychecks on yourself which is fine. Treat yourself with those for a job well done, there's nothing wrong with that. BUT you need to then cutback and look at your finances. As I said, the loans are the most important, then I would say transportation to and from work (remember no work, no pay) and THEN go follow jwilley's good advice of looking at rent
I did the same thing as OP and want to say STOP!!! Before my first year post-college I was $20K in debt thanks to overspending. And that didn't even include college loans.
I spent the next ten years living paycheck to paycheck because I had so much debt, to the point I almost got my car repo'd due to lack of payment.
You don't have to be frugal, but you do need to practice moderation. Pay your savings account FIRST (20% per paycheck). Then pay your bills SECOND. Then live off the rest. If you have a 401K with your new job, instead of putting just 3% in, consider putting up to 10% into it. If your company matches - that's free money you are not getting if you don't contribute to your 401K.
For your savings, considering having multiple types of savings accounts.
The emergency fund - where you put in enough to cover at least 6 months in bills in case you get laid off (although some now say you should have up to 12 months' worth saved).
The vacation fund - where you put in money for any vacation that you'd like to plan, whether it be a weekend at the beach or a week in Venice.
The repair fund - for when you have unexpected car repairs, or medical bills, or your phone breaks and you need a replacement.
The rainy day fund - I have a savings account that I put $15 a paycheck into. I pretty much ignore it, until something comes along that I REALLY REALLY want. For instance, I haven't touched it in several years, and it had over $1K in it. My husband and I are doing a home renovation project and wanted to lay down new hardwood floors in our TV room. Guess what paid for it? My rainy day fund.
You have been splurging for the past three months - now it's time to reign in the spending and begin buckling down and concentrating on SAVING. Because you can't always count on having a high-paying job in the future. So you need to save and plan for the day that comes when you might get laid off and have only unemployment to count on.
You are young, but if you lay down the right foundation now, then when you are older you will feel much more secure about your retirement years (which I know probably feel so far away, but you can't think that way). You can still ENJOY yourself - it sounds like you'll still have plenty of $$ leftover after putting 20% into savings and paying your bills.
I think a lot of you are misunderstanding her situation.
OP I am not in much of a position to talk since I am fresh out of college as well.
However, I consider myself sane enough (unlike most people on city-data) to say what you experienced is fine and normal. I have seen many people do it and its okay. You do not "have a problem" nor are you making massive mistakes.
You have money and you want to use it, especially if your job pays well. I would say, like most other rational people in here, just become more cautious of your spending and map out a budget. Include future costs and what you expect of your living arrangements when you move out.
Don't listen to the people with the stick up their arse. Their posts have shown they either have massive insecurities or incompetencies of their own and want to project them onto you.
Again, map out your finances and cut be aware of what you need in the future and what you should start saving up.
I agree but I would add in first payback for any loans (credit cards, student loans, car) you took out before the average rent. The debt that we tack on in college is typically what hurts young people first because as soon as you stop school, the loans creep in. These loans are crippling and take away most of your throwaway money. I would also then put transportation above that. Whether is by car or public transportation, you NEED to get to and from work. If you don't show up because you don't have gas or a bus card with money on the account, you don't get paid to pay off your loans, your rent, your retirement, your food, your other bills and anything else.
I find when you get you first job, you spend the first two or so paychecks on yourself which is fine. Treat yourself with those for a job well done, there's nothing wrong with that. BUT you need to then cutback and look at your finances. As I said, the loans are the most important, then I would say transportation to and from work (remember no work, no pay) and THEN go follow jwilley's good advice of looking at rent
I will disagree, and I will explain why. Through personal experience and watching what happens to friends and family I know paying off all the debt you have is great, but what happens if you lose the job? What happens if your car breaks down? Someone gets sick and you have to help them out or go visit them? You know what happens when you have a real problem without a real savings account? You go get credit cards or lines of credit and end up paying much higher interest then you had on the 1st loan.
The 1st priority should always be having a real emergency fund. I know guys like dave Ramsey say that pay off debt once you have an emergency fund of around $1000 and I do not agree, because I have seen to many people work hard to pay off student loans and debt on their home, paying rates around 4 or 5% and than have to take a line of credit paying 10-25%.
The whole purpose in paying rent to a savings account is to get used to paying the bills you will have when you move out on your own, and it gives you a chance to build that emergency fund, which should be 3-6 months of your expenses. You also should always save 10% of your income regardless whether it is in a retirement account or some kind of money market account to help with your investing.
Then you are welcome to make double payments on your student loan debts or whatever else you have to pay off. That way if you run into a problem you do not have to worry how you are paying rent or putting food on the table for a long enough period to get through the problem.
I will disagree, and I will explain why. Through personal experience and watching what happens to friends and family I know paying off all the debt you have is great, but what happens if you lose the job? What happens if your car breaks down? Someone gets sick and you have to help them out or go visit them? You know what happens when you have a real problem without a real savings account? You go get credit cards or lines of credit and end up paying much higher interest then you had on the 1st loan.
The 1st priority should always be having a real emergency fund. I know guys like dave Ramsey say that pay off debt once you have an emergency fund of around $1000 and I do not agree, because I have seen to many people work hard to pay off student loans and debt on their home, paying rates around 4 or 5% and than have to take a line of credit paying 10-25%.
The whole purpose in paying rent to a savings account is to get used to paying the bills you will have when you move out on your own, and it gives you a chance to build that emergency fund, which should be 3-6 months of your expenses. You also should always save 10% of your income regardless whether it is in a retirement account or some kind of money market account to help with your investing.
Then you are welcome to make double payments on your student loan debts or whatever else you have to pay off. That way if you run into a problem you do not have to worry how you are paying rent or putting food on the table for a long enough period to get through the problem.
I agree with emergency but how exactly would you be able to get to and from work without a car if your car is down and it isn't on a bus line and co-workers live alot further from you or how would you get to work if the transportation system is down due to in-climate weather but your company is open? If you don't work, you most likely don't get paid and there goes money going into the rainy day fund.
I agree with emergency but how exactly would you be able to get to and from work without a car if your car is down and it isn't on a bus line and co-workers live alot further from you or how would you get to work if the transportation system is down due to in-climate weather but your company is open? If you don't work, you most likely don't get paid and there goes money going into the rainy day fund.
If you have an emergency fund and your car breaks down you can either get it fixed or get another one, that is the type of thing an emergency fund is for. Than you can rebuild your emergency fund and get back to paying off the debt after that fund is back up. You get to keep your job and only have to deal with catching rides or the bus for a couple of days.
Without that fund you would have to take a loan to buy a new car or pay for repairs, and then you just added more debt, likely at a higher interest rate than your student loans are to start with.
Hey everyone. I really appreciate all of the responses. Wow I didnt expect to get this much advice, thank you! I definitely realize how irresponsible I am being with my money, and especially because nothing is ever guaranteed and Its always a possibility that I could lose this job as the economy is not great. I will start saving now and take the advice about the retirement. Also, I apologize if it seemed like I am bragging. I got dinged for a reputation comment saying that it was insensitive of me to brag about it here on this forum. I really feel bad now and didn't realize it was bragging, I am so sorry. I posted not to brag but because I honestly felt like I could potentially go into a lot of debt if I didn't stop and think about/get advice about my situation from people who are wiser/been there,done that. I apologize again if I offended anyone.
Its especially important for me to wisen up because I have had to start paying my student loans back. I have so much student loan debt, its quite depressing!
Last edited by cynnie1993; 09-12-2014 at 04:54 PM..
Hey everyone. I really appreciate all of the responses. Wow I didnt expect to get this much advice, thank you! I definitely realize how irresponsible I am being with my money, and especially because nothing is ever guaranteed and Its always a possibility that I could lose this job as the economy is not great. I will start saving now and take the advice about the retirement. Also, I apologize if it seemed like I am bragging. I got dinged for a reputation comment saying that it was insensitive of me to brag about it here on this forum. I really feel bad now and didn't realize it was bragging, I am so sorry. I posted not to brag but because I honestly felt like I could potentially go into a lot of debt if I didn't stop and think about/get advice about my situation from people who are wiser/been there,done that. I apologize again if I offended anyone.
I normally am one of the first to see bragging but I actually didn't see it in your post strangely enough. I saw more that you made good money and overspent on spending money on yourself.
I am all for spending usually (I splurged for a car), but you have to have foresight too. How are you going to put a down payment for your new place in 8 months if you keep doing this? Or are you getting help? Or are you renting?
At 21, now is a great time to start putting *some* money aside for retirement too (401k, etc). If you do it right, you'll have over a mil easy. And these days that's not much.
Some months my "fun stuff" spending is less than $100/mo. and when my credit card statement shows that, I just have to smile. Set your own budget, at the very least.
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