Ok, this post is for younger kiddos. When we are growing up, we never really think about how much everything costs. It’s great if your parents make you realize the value of a dollar like mine did! Thanks mom. It’s also great if you learn to not spend more than you have early on. Thanks mom, again. My mom really has a great head on her shoulders when it comes to managing money. Despite the fact they don’t earn a lot, my mom always has some money put away for the rainy days. All bills are always paid on time.
But still, even if you get a head start, it’s really a shock when you start paying for all your bills. As a broke college student, my bills were limited. I had a fixed monthly rent that covered electricity, water, room, and internet. Gosh, it was a great deal. I miss university housing. I feel true sadness. I didn’t have a car, and relied on public transportation, my own two feet, my boyfriend (now husband), and friends. While I love having a car (believe me, transportation independence is great), cars cost money. You have to pay for gas, insurance, maintenance, and well, if you don’t own the car, car payments.
Food is, also, pricey. I went to Target yesterday, spent $50, and walked out with three bags. Everything was a minimum of $2.50 each without taxes. So you can imagine it adds up quite quickly. I didn’t even buy major food. I just bought ingredients to make a cake, and some dinner stuff. So, remember once you get older you can’t live off ramen, and cereal. Well, not if you want to be semi-healthy.
I feel like I go to the doctor more often than before. Co-pays, medicine, braces, glasses, and contacts add up. I thought $2,500 for my FSA was going to be too much, and it’s already been allocated.
We live a pretty frugal life. We don’t go out very often, try to limit take-out, have no debt, and yet, I feel like we burn through cash so quickly.
As a young college student coming out into the real world, it’s easy to think you can afford more. I think there are ways to save you at the beginning.
Set a Budget
I know so many personal finance bloggers repeat this over and over again. It’s a topic many write about. But maybe there’s a reason why everybody writes about it? Because it’s so important! So many people struggle with their budget, even the best personal finance bloggers. I struggle with our budget. A good way to look it at is if you set a budget, plan to go over it by another $500. Things will come up. Then relook at your budget. Is there anything you can cut back to make sure that buffer fits in your budget? Maybe go with a cheaper internet package? Try a more affordable apartment or house?
Set Saving Goals
It’s easy to say, I’ll figure out how much I can save once I realize how much I’m spending. But then there’s no incentive to reach for higher saving goals. When first start out we have no idea what we want out of life. We have an idea, but it may change. I think it’s best to be prepared for the future. Learn how to live on 50% of our income. Save or invest the rest. There will come a day where you may get laid off or maybe you find out you don’t like your job. This will allow you to have the freedom to move on.
Save for Retirement
I find most Americans are very trusting of the government as compared to other nationalities. I’m not relying on the government or any entity to take care of me when I’m older. Congress has its own interests, and it’s not for the little people like me. So, you should start saving for retirement early. Plus, you won’t even realize the money is gone, if you set your budget to account for those retirement automatic funds at the beginning.
Diversify your Income
I think we all rely on one income too much. I know I do. Despite my work this year to try to diversify my finances, my salary is my main source of income. My husband and I have some ideas on how we will eventually get there. My next 20 years are probably going to be spent working for a corporation, but I want to develop those side incomes. My greatest challenge is finding the energy to tackle all the ideas for projects I have in my head. I dropped my babysitting gig last year because I thought I needed more time to relax and concentrate on my job. At the point, I was feeling really stressed balancing everything in my life. My new job was challenging, so I decided I needed to concentrate on that. Now, I’m ready to add to my workload. I’ve realized corporations are not loyal to their employees; at least not to the right ones. It’s been a revelation that has made me realize, I can’t rely on my corporate salary forever.
What I’ve Learned So Far
Managing your money is an active project. You can’t put it on the back burner and hope for the best. When I first set our budget a little over a year ago, I thought we were going to meet it every month. But we didn’t. Spending categories are very fluid. I think for me it’s easier to meet my saving goals. They are very specific, and I transfer a certain amount to savings.
I hope this feedback helps you get started on a great journey!