NASHVILLE (WSMV) – Graduating and starting your career is an exciting time.
Natalie Gillisse will be starting her job in August and already worries about balancing a budget. Credit cards can be one of the biggest pitfalls for those just graduating.
“Be careful of rationalizing, we all can find excuses for what we wanna do,” John Stauffer, a certified financial planner.
Instead, Stauffer says to make it a point to save your money and pay yourself first.
“When you get paid just make sure some of that money gets set aside,” Stauffer said.
One of those ways could be a retirement fund. An IRA and Roth IRA are great options, and if your employer offers a 401K take advantage.
“There aren’t many investments they can offer you a 100% guarantee return so definitely do that,” he said.
Also, track your spending and expenses through apps like Mint or Quick. Even just writing it down on paper can help your budget.
“I actually over winter break was working on a spreadsheet so I can budget for groceries and rent,” Gillisse said.
“I use Bank of America and through the app you can see how much monthly spending you’re doing and then work to set a goal if you want to cut it down,” Ellie Bush, University of Richmond, said.
One rule of thumb, try only spending 35% or less of your salary on housing. Although, the ratios of expenses to savings can be different for everyone.
Stauffer says his best advice is to always remember, it’s not what you make, it’s what you spend.
Another expense many graduates take on are student loan payments. Although it’s considered good debt, Oasis Wealth Planning Advisor Steve Martin says to look into your best repayment options. Make sure to do your research before you think about refinancing those loans.
“If it’s with the Federal government there are certain benefits by keeping it with the federal government and different payment plans that can stretch out those payments depending on someone’s income,” Martin said.
The repayment of federal student loans was paused during the pandemic interest-free. It is set to remain on pause through the end of September.
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