"Save for the rainy days," they say — if only it were that easy. Fresh graduates getting their feet wet in the real world may find this even harder, especially when the big bills come and every hard-earned penny counts. Fortunately, saving isn't an impossible task. Just follow the tips below and you'll be able to save up.
1. Start saving as early as possible Talent Lab editor Kira Bindrim advises fresh graduates to start saving as early as possible. You don't have to start big right away, but start small and gradually work your way up. Have a portion of your salary automatically transferred to a no-touch checking account to make saving easier and more convenient. It’ll also be wise to take advantage of your company’s retirement plan, especially if they will match your contributions, or open an IRA which will help you save money before taxes. The earlier you start, the sooner you’ll build up your savings.
2. Open a high-yield savings account While it’s vital to stash away some money, where you put it is just as important. To that end, you might want to save your money in a high-yield savings account (HYSA), which has a high annual percentage yield. Put simply, a HYSA will let your money earn money through compounding interest, provided you don’t withdraw it. So, the longer you keep your money, the more it’ll earn. Having said that, you’ll need to do your research to find the right bank for you. Ideally, you’d want a HYSA that compounds multiple times, but with low fees so you can maximize your savings.
3. Keep living like a college student While making money can make it tempting to spend it all and treat yourself after years of crawling out of college, you may still have to live like a college student. Heed the best financial advice financial planner Robert Stromberg ever got: Earn money like a professional, spend like a college student. That means keeping your expenses low and cutting out unnecessary spending. In this regard, try living on the 50/30/20 rule: Allot 50% of your income to essentials such as rent, utilities, and debt payments, 30% to personal discretionary spending, and 20% to savings.
4. Track everything A good way to know if you’re spending prudently is by tracking all your expenses. For this purpose, you can use a range of budgeting apps such as Mint, You Need a Budget, and EveryDollar. Any of these apps will help track where your money is going, and maybe even keep you from spending unnecessarily. You might want to track your savings, too, as well as your investments (when you start making some) by using personal finance platforms like Personal Capital.5. Have a strategy for debtChances are you have student loans, especially now that a four-year course can cost as much as $19,000. As a result, many fresh graduates are saddled with debt, and it is making it hard for them to save. If you're one of them, you'll need to come up with a feasible plan to pay off your debt once you start earning. Thankfully, you'll have a 6-month grace period before you're required to start paying up your student loans — use this grace period to lay the groundwork for repayment as soon as possible. To do so, get in touch with your loan providers, and work with them on a reasonable payment scheme. Then, fulfill your end of the bargain.
By: Shantelle James
Friday, Aug 14, 2020 at 12:00pm Eastern Time
Saturday, Aug 15, 2020 at 10:00am Eastern Time
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