Transitioning from college student to full-time professional
can be difficult, but don't let finances overwhelm you.
You landed a job, maybe you even decided to live with roommates
to lower your expenses, but that entry-level salary slips right
through your fingers.
So you're finally out in that world repeatedly dubbed the
"real" one, and it isn't anything like the TV show. Not that
you're surprised, but no one told you the transition from
student to full-fledged adult could be so overwhelming. Topping
your list of stress inducers: living on a budget.
You landed a job, maybe you even decided to live with
roommates to lower your expenses, but that entry-level salary
slips right through your fingers. Before you consider
desperate measures (like moving back home with your
, review these tips for surviving on a budget
and still living like a grown-up.
Being on a budget means you know where your money
goes--all of it. Don't scratch your head and contemplate your
paycheck's disappearing act. Instead, carry a small notebook
with you, and record every purchase you make within a month's
time. A pack of gum, a 50-cent newspaper, your daily cup of
coffee, bills--leave nothing out. You may feel obsessive
recording the bag of pretzels you buy from the vending machine,
but doing so will help you create a realistic budget and see
that some seemingly insignificant purchases are actually small
extravagances you can do without. Some other tips:
Withdraw your weekly allotment on a designated day, then
leave your debit and credit cards in your dresser, maybe
saving one credit card in case of an emergency.
You can also separate your money into separate envelopes,
with food money in one, entertainment in another. That way
you know what specific portion of your budget you've spent.
Plan your ATM use to avoid fees.
Use a credit union if possible--better rates and lower
Don't use your credit card unless you have the cash to pay
for what you want; the interest rates can provide years of
debt. If necessary, set aside a little money each week
until you can afford the purchase.
Round every purchase up to the nearest $1, $5, or $10, and
keep the remainder in a jar. If you pretend that a $3.50
sandwich costs $5, you will be apt to spend less as you
will reach the end of your money sooner. And you'll end up
with a cushion tucked away.
Don't keep your money just in a savings account; opt for
market funds, CDs, or mutual funds. Your money will grow
more than in a savings account and may be more difficult to
get at (which will cause you to use it less).
Use no-load mutual funds and stick with index funds for the
Invest in your 401(k) to get your employer matching portion
and tax savings.
Establishing yourself in a new place can cost plenty.
Maybe you have to buy a bed for the first time, or a dresser,
or a couch. Just remember that what you buy now does not have
to be your lifelong furniture. If your relatives don't have
furniture to spare (and you should solicit all of them), try
yard sales (especially in affluent neighborhoods), estate
sales, and leftovers lining the sidewalks of nearby colleges
and universities at spring semester's end.
Other less tangible things we can't do without--utilities,
transportation, insurance--can also strain a budget. When it
comes to any kind of insurance, always search for the lowest
rates. While a request for a car insurance quote can take 20
to 30 minutes, it's time well spent. If you travel via public
transportation, do the math and see if a monthly or yearly
pass will save you in the long run. Consider these bits of
advice as well:
Carpool if you must commute by car.
Run, walk, or bike to work instead of taking public
transportation or a car (or do this for part of your
commute)--you'll save on commuting expenses and potentially
on a gym membership.
Rent a car for use on weekends--it's cheaper than owning,
insuring, and maintaining your own.
Avoid cabs whenever possible.
Use heat and air conditioning carefully--turn the heat down
when no one is home, and agree on a comfortable temperature
and keep the thermostat there.
Be extra careful about leaving on lights, appliances,
Go out rather than use your air conditioning. Plenty of
public places are kept cool.
Use rechargeable batteries.
Don't get cable TV.
Email whenever possible instead of making long-distance
Get a goldfish instead of a dog or cat.
Cancel your magazine and newspaper subscriptions and read
Instead of making charitable donations, volunteer your
Don't buy something unless you plan to throw out the thing
you are replacing. For example, don't buy new bath towels
unless you really plan to throw out the old ones. This will
help you buy wisely and accumulate less junk.
Unless you're planning to fast in the near future, you
must buy food. But if you plan carefully, you can lower your
monthly expenditure. First and foremost, pack your lunch.
Brown-bagging may take some extra time and forethought, but
spending $5 on lunch every work day will cost you a minimum of
$100 a month. If your workplace has a refrigerator and a
microwave or toaster oven, you can bring in the fixings for the
When shopping, always sign up for your grocery store's money
saving card, and scan the store circular for weekly specials.
Comparison shop for the lowest prices, and use coupons. Many
stores double their value, allowing you to save big. Here are
some other ideas:
Try to not purchase food at the corner store where it's
When possible, shop at wholesale clubs.
Buy store-brand items, especially cold medicine and pain
relievers (same ingredients but much cheaper).
Buy juice concentrate instead of juice in bottles or
Plan meals for the week, trying to use the same ingredients
for multiple meals, like cooking a roaster chicken and
using the cooked chicken (which can also be frozen) for
tacos, chicken salad, tetrazzini, lunch meat, etc.
Keep a variety of frozen and canned food available. Freeze
leftovers, meats, and bread, reducing waste and ensuring
that there's always something to eat so you don't order in
or eat out unless it's for a treat.
Stop buying your morning coffee or tea. Either drink what's
provided at work or bring yours from home in a travel mug
or Thermos. A mere $1 or so a day can really add up. The
same goes for your morning bagel or doughnut. Buy a week's
supply at the grocery store and bring your breakfast to
Avoid using the vending machine at work. Instead, buy a bag
of candy or snacks and keep them at your desk.
Arrange dinner clubs with your friends where each person
takes a turn cooking for the group. You can socialize
without the cost of eating out.
The real world can be a fun place, and every budget should
include room for simply enjoying yourself; just play within
moderation. Chances are, you don't need to see a full-price
movie more than once a week, nor do you need to eat out every
weekend. Your monthly entertainment allotment is yours to spend
as you like. A pricey dinner is fine as long as you don't mind
renting movies for the rest of the month. Some other
Looking the part
Use an exercise tape, run, or bike instead of paying for a
gym membership, or see if you can provide a service (like
babysitting) in exchange for a free membership.
Go to friends' parties instead of bars.
If you need a vacation, stay with friends, in hostels, or
in cheap motels instead of pricey hotels. And, the earlier
you make your arrangements, the cheaper your airline fare
Make presents, don't buy them.
Use your public library rather than bookstores.
Investigate movie ticket deals provided by your school or
Sneak your own lower-priced snacks into the movie theater.
Buy used CD's instead of new ones.
Download legal MP3s instead of buying CDs.
Use free Internet service providers and/or email providers.
Part of being a professional is looking professional, and
that means new clothes. Even if you end up in a casual work
environment, chances are you will need some new outfits--for
interviewing, special occasions, or business presentations.
Here are some tips to getting by:
Never allow yourself to buy any item of clothing when it is
Shop at off-price stores or factory outlets.
Buy clothes that you can dress up or down for either work
or going out.
Try to avoid "dry clean only" items.
To reduce dry cleaning costs, use an at-home dry cleaning
kit and iron your own shirts.
Borrow special occasion clothes instead of buying a pricey
outfit for a one-time affair. Or, "invest" with a couple of
similar-size friends in a few good outfits or suits.
The average fabric softener sheet is larger than
necessary--use a half-sheet at a time.
Instead of getting professional manicures, have your
friends paint your nails.
Get your hair cut by students at beauty schools.
Buy solid, muted colors for jackets and sweaters and
highlight with nicely made T-shirts. You can even iron your
T-shirts to enhance the look.
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