There is so much change that comes with graduating college and starting your first job. One big change is your suddenly increased income. Along with this change comes the responsibility of properly managing your finances. Financing your education is a huge accomplishment, and now that you’ve graduated, it’s time to start planning for your financial future. Proper financial planning advised by AG Morgan Financial Advisors can put you on the right track for a secure future.
- Live below your means.
This may seem like common sense, but it is crucial to remember as your income starts to increase. Just because you can afford that new car or designer purse does not mean you should purchase it. When living below your means, make sure to still allow yourself some wiggle room in your budget for fun purchases and experiences. You do not want to be too restrictive and set yourself up for financial failure. Find a happy medium and stick to it!
- Invest in yourself.
Your 20s are a great time to invest in your future self. If there is a skill you have always wanted to learn or an experience you want to have, now is the moment to go for it! These investments will pay off later on down the road, whether it be in your career or personal life.
- Make a budget—and stick to it!
Another important step to financial success is creating a budget and sticking to it. There are dozens of ways to create a budget, so find one that works best for you and your lifestyle. Budgeting may not be the most exciting task, but it is crucial to maintaining financial stability. When making your budget, be sure to be realistic and adjust as needed. There will always be unexpected expenses that come up, but if you have a solid foundation, they will not throw you off course.
- Start saving for retirement NOW.
It may seem like retirement is a long way off, but time has a funny way of flying by. The earlier you start saving, the more time those savings have to grow. Even if you can only afford to put away $20 per week, that money will add up over time! Many employers offer 401k plans that are easy to sign up for and make contributions to—take advantage of them!
- Build an emergency fund.
No one likes thinking about bad things happening, but unfortunately, they do happen from time to time. A broken-down car or last-minute hospital visit can really set you back financially if you are not prepared. Having an emergency fund acts as a safety net in case something unexpected comes up. Shoot for three-to-six months’ worth of living expenses saved so that you know you can cover anything that comes your way!
As a new college graduate, proper financial planning is key to setting yourself up for success. By following these tips and being mindful of your spending, you can ensure a bright future full of stability and security.