Congratulations on landing that first big job! Now is the time to put good saving habits in place that will benefit you for a lifetime. People who start saving early in life are far better than those who wait 10 or 20 years and then try to play catch up.
One of the best habits you can develop is to have a personal budget. Don’t let the word scare you. A budget will show you where your money is going, and if the end result isn’t what you want, then you can modify your spending. A budget is merely a plan to get you what you want. If you don’t have a budget, then it can be challenging to reach your goals.
It’s natural that your budget will be tight right out of college. But if you’re serious about saving, you have to have the right mindset. Start by cutting out miscellaneous expenses that bring little value to your life. This doesn’t mean you need to cut out all miscellaneous expenses, though. In order for a budget to work, it needs to include some fun, just not so much that you have no money left for anything else.
In addition to a budget, you should take advantage of easy ways to save. If your employer offers a 401K, for instance, you can sock away money without being taxed on it. Some employers will match your contribution up to a certain percentage, which can make saving even easier. Don’t wait until you can set aside large amounts; start small and increase your contributions as you can.
An automatic payroll deduction can make it easy to save, too. Can you put $20 per paycheck into a savings account? You’re more likely to guard your savings if you can’t easily access it, so make it a point of putting money into a savings account, rather than leaving it in checking.
If you get a raise after a probationary period, don’t spend this money. Put it into a savings account instead. Too many people increase their cost of living as their income goes up. It’s much easier to get ahead if you learn to live on less than you make.
Once you land your first job, limit the amount of debt that you take on from here on out. If you currently have credit card debt, personal loans, or student loans, work out a plan that will help you to pay off your debt more quickly. Your budget will help you to reach these goals. Take a minute to add up how much you owe in debt payments each month and then determine what you could do with the money if you were not in debt.
Whether it is money or time, make it a priority to find a way to give back to your community or the world in general. There are so many people struggling, and you have the opportunity to make a difference. If you establish the habit early on, it will be easier to continue to help as you get older and busier. The volunteer opportunities may be simple like volunteering for a day or two each year at your local food pantry or more extensive like doing volunteer tourism. No matter what you choose, be sure to research to make sure that the money or time that you donate is doing the good you want it to.