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Did you guys know I accept guest posts on other topics aside from mental health? I just love when you guys share your expertise with each other. It means we get a wealth (that pun’ll make sense in a minute) of knowledge based on the real personal experience of a whole bunch of people, not just me. It makes Uninspired a really diverse collection of information for people in their twenties. In the spirit of that, today’s guest post is about how to set a budget that will help recent graduates pay off their student loans!
Our guest, Jamie, is a finance enthusiast who loves her job teaching young adults about financial independence. Here’s her take on budgeting for recent graduates!
Budgeting 101: Recent Graduates
When you graduate college there could be so many emotions and thoughts going through your head. Maybe you are excited about the future but questioning what to do next. You may know exactly what your next move is. No matter what it is, they are fine places to be because you graduated and it is your time to shine.
But there may be a slight problem you haven’t figured out yet… how to set a budget. It may not be something you have had to deal with, but you are going into the real world and will be dealing with real-life expenses. So that means it’s time to learn to budget!
Go over your expenses
Start to think of what you pay for now and what you’ll have to start paying for in the future. The now payments could be anything from groceries, streaming services, and clothes. The future will be a long list of bills like rent or your student loans. (gasp!) Yes, those student loans will have to be paid for now.
Now you will ask yourself two questions about each expense:
- Do I need this?
- Can it be cheaper?
I know we would love to say yes to the first question with some bills but sadly, we cannot do that. What it really means is do you need to shop every week for clothes or do you need both Hulu and Netflix to watch your shows. Going over these costs and cutting out the unnecessary ones will help you save some extra money.
The second question will apply to every expense you have because everything could always be cheaper, even your bills! Make a plan before you hit the grocery store, clip coupons and scope out what is on sale that week. When you have to shop for clothes, shop the sale racks to score the best deals, or even check out your local consignment store. When it comes to bills, there are ways to lower your monthly payments depending on what it is. Student loan debt is something college grads struggle with when it comes to their monthly expenses. This article talks about small changes you can make to pay off your student loans faster. Make sure you’re in good standing with your landlord, some apartment complexes have specials to lower your rent for upcoming months. Some even offer a month’s rent free when you are a new tenant.
Related: Saving Money in Your Twenties
Set a budget
Now that you know exactly what you spend each month, it is time to set a monthly budget. Pick a number that allows you to pay for the essentials listed above but doesn’t use all of your paycheck. The budget will be here to help you save money for the future. Some people can be wrapped up in the savings so try to be rational. It is okay to not live completely off the grid and to treat yourself sometimes! Also, when you set a budget it does not have to be concrete. The budget can change to work with your lifestyle each month.
Once you have gone through your expenses and gotten rid of and/or lowered what you could and set your actual monthly budget, it is time to organize. Setting a budget is easy but sticking to it is difficult. The best way to handle this is to make or use budget sheets. (I have shared some of my favorite worksheets here.) By using these worksheets it will be easier to keep track of where your money is going and if you are off budget.
If you do not want to use these sheets, there are other ways to track your spending and to stay on budget. First, have a calendar and a journal. On the calendar, at the end of each week, calculate how much you can spend to stay on budget. During your day, write down everything you pay for whether it was lunch, a bill, or coffee. At the end of the day add up your total and mark it on the calendar. You will be able to see by the end of the week if you stayed on track! If you didn’t, you will have to lower your total on the next week. If you did, you can either keep it to save extra money that month or add it to the total next week.
This will be hard to do at first, maybe even stressful. But don’t give up, it will get easier as time goes on and you see your savings grow!
Things to remember
You can do endless research on budgeting and you will get different answers every time. Everyone has different lifestyles and chooses to save differently. Something you try one month may not work for another! Try to remember that budgets are not set in stone and they can change. Do not get discouraged with this. It took you years to learn your craft in college, it will take time to learn your budget and new lifestyle. It will all be worth it in the end when you are a budget guru and have tons of savings.