You Are Never Too Young to Save Money

Starting out on your own is at the same time thrilling and terrifying. You’ll have newfound freedom, but financial responsibilities also come with that freedom. First off, you have to have a job, but you probably already guessed that. Here are some helpful hints to get you started off on the right foot:

• Spring for a new suit, a haircut, and shoes to be prepared for interviews. First impressions count for a lot, so it’s money well spent.
• Don’t waste your money on resume tutorials; you can find free tips online.
• Get in touch with a local chapter of your college’s alumni chapter. These organizations can be great for networking.
• Don’t take a job in a field you’re not trained in because it offers a higher salary. You could slow your overall career progress and end up unhappy and stuck in a field you didn’t want to go into in the first place.

Budgeting Is Key

You won’t be able to save money consistently unless you plan for it with a budget. Financial experts recommend the 60% solution, which means the necessities of life come out of the first 60% of your pre-tax income. The rest is for saving, paying down debt, and discretionary spending. Here are some other budgeting tips:

• Car insurance is necessary. Higher deductibles can help you save on premiums.
• A single person should spend about $150 per month on groceries. Avoid prepackaged food and eating out if you find yourself going over that limit.
• Make a budget that allows you to pay down your credit card debt aggressively. High interest rates will be the biggest drain on your finances, so rid yourself of debt.

Save Early, Save Often

It’s pretty easy to come up with reasons not to save, but the sooner you start saving, the easier it will be. You’re going to need savings eventually to buy a house or retire, so start as soon as possible.

• Sign up in your company’s 401K plan. Employers usually offer a matching contribution, so, if you miss this opportunity, it’s like throwing away money.
• Be aggressive. One of the benefits of saving and investing early in life is that you can afford to be aggressive because fluctuations will be evened out over time. Put about 90% of your investments in stocks, which grow an average of 10% annually.
• Start a Roth IRA. You will put after-tax dollars in this account, but, when you withdraw money from the account later, it will be tax-free.
• Start an emergency fund. You don’t want to get caught underneath a mountain of debt because of one financial mishap. If your car breaks down or you have to pay an insurance deductible, you want to have the cash on hand. Try to save three months’ worth of living expenses.