Whether it's paying off your student loans, purchasing a car or saving for your first home, you need to establish clear financial goals. Write them down on a note card or a sticky. Put it on your bathroom mirror or fridge so you have a constant and daily reminder. By doing this, you are making saving a priority—and hopefully you won't be tempted to make unplanned purchases.
Organizing Your Finances
It's shocking to realize all the costs involved with living on your own. You'll want to create a spending plan. By doing so, you'll be able to identify where you can find extra money to sock away in your savings account. While everyone has different budgetary needs, it's always a good rule of thumb to keep your mortgage or rent costs at 30 percent of your take-home salary. Food costs should be about 12 percent; transportation at about 15 percent; insurance at 5 percent; 401(k)/retirement savings at 6 percent; and an emergency savings fund at 5 percent. The rest should be used to cover any medical expenses, debts, clothing, entertainment and other miscellaneous expenses.
Keep Your Expenses Low
While you're establishing your career, your goal should be to cover the costs of all monthly expenses, pay off debt and save as much money as possible. Live within your means. (You may need to get creative!)
- Minimize your expenses by sharing your living space. Get a roommate or consider living with Mom and Dad. You'll not only reduce the cost of your rent, you'll save on utility costs.
- Cut out unnecessary, pricy expenses like high-end cable packages. Opt for a mobile phone instead of a home phone.
- Try not to eat out. You don't have to become a recluse, but you do need to keep your food expenses in check. Eat breakfast at home, pack your work lunch and limit your dinners out to once per week at a reasonably priced restaurant.
- Skip expensive vacations and take advantage of free events in your town.
Paying off student loan or credit card debt