I don't know about you, but I was on expert on spending since I could walk and lousy at everything else finance related for much of my life, well into early adulthood. Considering the rampant way in which so many Americans have bought things on credit, I would venture to say that this is true of a lot of people as well. While my parents weren't the best at educating me about the ins and outs of personal finance, I learned eventually, but I learned the hard way. Here are a few tips for those of you who are just starting out on your own but you don't know exactly how to go about handling your money.
1. Getting that first check from your full-time job can be exhilarating, but don't get too excited.
I think the biggest problem that newly independent young professionals have with their money is that they simply aren't used to having so much. When I got my first check, that was the most money I had seen in my bank account in my entire life. I was so excited that I proceeded to blow through so much of it after I had taken care of rent and other basic living expenses. As such, I was living paycheck-to-paycheck for much longer than I care to admit. Whenever you get paid, pay yourself first by setting aside at least 10% of your earnings each month.
2. Most young professionals have modest tastes. Keep it that way for as long as you can.
The great thing about being a newly employed young person is that you are making ample money but you don't have things to worry about like paying for kids and a mortgage. Coming directly out of school, during which most students are barely scrounging by, you probably also haven't yet developed very expensive tastes. Keep it that way by living in a modestly priced area (with room-mates if possible) and keeping basic expenses like groceries low. Grown up tastes are pricey, so stay young for as long as you can.
3. Most people don't start investing until they're in their 30s. Beat them to the punch.
If you are new to the working and making money world, you are probably terrified and confused by even just thought of investing. I know it sounds like an extremely complicated game of roulette or craps, but believe me, it's really not that difficult if you do your research. Read some beginner books on investing, check out young professional investing blogs, and ask friends who studied finance/economics and may work for banks or investing firms.
4. Limit your entertainment expenses.
The largest expenses that my friends and I encountered when we first embarked out into the real world were all in some way or another related to entertainment. That's because when you're young and not yet married, you have ample free time to enjoy yourself beyond the confines of family responsibility. Of course, having fun is fine, but be sure to set aside a set amount that you spend on going out, eating out, and buying things like electronics, such that you don't take things too far.
These are just a few easy ways to make sure your financial health doesn't plummet as soon as you get things started. Your credit score is probably good and your debt is probably low at this point, so don't mess it up by starting to save and budget early on.
1. Getting that first check from your full-time job can be exhilarating, but don't get too excited.
I think the biggest problem that newly independent young professionals have with their money is that they simply aren't used to having so much. When I got my first check, that was the most money I had seen in my bank account in my entire life. I was so excited that I proceeded to blow through so much of it after I had taken care of rent and other basic living expenses. As such, I was living paycheck-to-paycheck for much longer than I care to admit. Whenever you get paid, pay yourself first by setting aside at least 10% of your earnings each month.
2. Most young professionals have modest tastes. Keep it that way for as long as you can.
The great thing about being a newly employed young person is that you are making ample money but you don't have things to worry about like paying for kids and a mortgage. Coming directly out of school, during which most students are barely scrounging by, you probably also haven't yet developed very expensive tastes. Keep it that way by living in a modestly priced area (with room-mates if possible) and keeping basic expenses like groceries low. Grown up tastes are pricey, so stay young for as long as you can.
3. Most people don't start investing until they're in their 30s. Beat them to the punch.
If you are new to the working and making money world, you are probably terrified and confused by even just thought of investing. I know it sounds like an extremely complicated game of roulette or craps, but believe me, it's really not that difficult if you do your research. Read some beginner books on investing, check out young professional investing blogs, and ask friends who studied finance/economics and may work for banks or investing firms.
4. Limit your entertainment expenses.
The largest expenses that my friends and I encountered when we first embarked out into the real world were all in some way or another related to entertainment. That's because when you're young and not yet married, you have ample free time to enjoy yourself beyond the confines of family responsibility. Of course, having fun is fine, but be sure to set aside a set amount that you spend on going out, eating out, and buying things like electronics, such that you don't take things too far.
These are just a few easy ways to make sure your financial health doesn't plummet as soon as you get things started. Your credit score is probably good and your debt is probably low at this point, so don't mess it up by starting to save and budget early on.
This is a guest post by Alvina Lopez who is a freelance writer and blog junkie, who blogs about accredited online colleges. She welcomes your comments at her email Id: alvina.lopez @gmail.com.
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