Once you are out of college and enter practical life, expenses tend to pile up. You know the money is going to come in the form of a paycheck, but once the month starts rolling, you don’t realize how fast the money runs out. Whether you are setting out on another profession, anticipating purchasing a house, or getting ready for kids, how you handle this financial turn in your life decided how the remainder of your finances will be in the future. You may be making more money than before, but there will be a slew of new challenges as well.
Nonetheless, if you are happy to have a receptive outlook to new ways and better approaches to managing finances, there are many practical ways that may motivate you to assume responsibility for your very own life and financial security. Below are some tips that will but budgeting and managing finances in a new perspective for you.
1) Pleasure can wait
This may sound cruel. After all, you have spent your high school studying hard, working and studying even harder in college and then struggling to find a job. Now that you are finally getting a big paycheck, what’s the harm in loosening up a little? At this point, you must fight the impulse to invest in a huge house or a cool car. The trick here is to never collect liabilities more than your income or assets can pay for.
2) Review yourvices
Shocking as it may seem, you accumulate a number of bad habits in high school and college that add up to your expenses without your realization. Smoking, drugs, drinking and video games are the most common amongst them. To manage your finances better at a later age, you need to review these habits and cut back on them. Even if you start from eliminating one or two packs of cigarettes per week or a bottle or two of wine, you’ll be surprised at how much you can save. Moreover, these things lead to bad health, so you will be also saving on the medicines and hospital bills.
3) Evaluate your monetary progress
How far have you come financially? Recognize your progress. It will give you an insight as well as motivation that will keep going you going. In addition to this, honestly assess your mistakes and figure out their solutions. The positive aspect is that at this age, it is easier to recognize what is the correct way of doing things, but still young enough to rectify from your financial blunders that may have affected you.
4) Cook at home
This may seem like a small thing, but all that packaged food as well as take-out and food deliveries are burning a hole in your pocket. Cooking at home saves a lot of money. In fact, there are always left over in the fridge or freezer, and can always heat up food on the go. Learning to eat at home is one of the simplest yet significant ways of managing your finances.
5) Write it down
This may seem obvious, and you may be thinking “Meh”. However, it is one of the most sure-fire ways to track where all your money is going. Start by writing down the bills that you pay every month such as electricity, gas, credit card bills and all other monthly bills. Next, write down the approximate spending that you are planning in the month, these include clothes, gifts and other miscellaneous items. After this, make sure that at least fifteen percent of your salary should remain to go into savings. If not, tweak the expenses and do the math again.
6) Time is money
This adage is old, but it is true. Focus on maximizing time and using it more efficiently, rather than trading time for money. Dedicate your time to tasks that give good value for money. If you want to, pay college students and high school kids to do mundane tasks for you that you may feel are below your level of expertise. If you think you are wasting your time at a job you don’t enjoy, you are probably right. Try to invest in tasks that you enjoy and add value to your time.
7) Turn to VOD entertainment
With so many form of entertainment, such as Netflix, Hulu and YouTube, it makes no sense to dish out around two hundred dollars for a cable service. Ditch the cable service and sign up for video on demand services that cost as low as eleven dollars per month. The difference is huge. Even If you sign up for multiple services, you end up saving hundred dollars at the very least each month.
8) Your downtime decides your success
What exactly are you doing in your downtime at work? This is the factor that ends up defining your finances and your success. Filling in your downtime with Candy Crush may seem easy, but this is a mind numbing activity. Try to use this time constructively, plan your next tasks, or better learn new skills. Prepare for certifications or try to improve the tasks that have been completed.
9) Invest in good transportation
After a lifetime of walking on foot or cycling to your destination, the attraction in buying a car can be overwhelming. However, invest in good and reliable form of transportation. Beware of going for a new or high maintenance car. Stick to used cars, or if possible, get a subscription for the local subway. If you are of an adventurous nature, buy a bike. It won’t only get you to your destination faster, but will cost you lesser than a term, both in terms of down payment and mileage.
By following these simple yet effective rules, you can one day have a net worth you will be proud of. Not only this, but you can also give your family the future you have always envisioned by managing your finances correctly.