We all heard it in college: Save your money, save your money, please, I’m begging you, save your money.
But, if you were like me, you probably laughed a little inside your head and thought, “Ha! What money? I don’t have any money.”
However, now that you’re a new professional, you might be thinking “Ohhhh . . . that money.” There’s nothing like that feeling of getting your first paycheck. Just think of all the stuff you could do! And the things you could buy! However, those people in college were right. You really need to save your money.
Saving is so much easier than it seems, I promise. When you set up your direct paycheck deposit with your employer, did you have some deferred to a savings account? If you did, then look at you! You’re saving already! Electing this option is great because it requires no effort on your part. The effort only comes in creating a budget, which seems so daunting at first, but once explained, is going to be your lifesaver (and your money-saver).
One of my communications professors actually brought a financial advisor into our class senior year to explain a budget, and I remember he had this to share about a monthly budget:
1. Pay yourself first. Period. 10 to 20 percent a month should be budgeted for savings.
2. Your rent should take up no more than 35 percent of your budget. If it is more than this, you cannot afford your living space. (Get a roommate and cut that rent in half!)
3. Car and insurance should account for 25 percent of your budget.
4. Those utility bills that won’t stop coming in the mail? Utilities should be 5 to 15 percent of your budget.
5. Student loans are a huge expense for some recent graduates. They should account for about 33 percent of your monthly budget.
6. Food is necessary, obviously, and now that you’re out of college you can possibly eat more than Ramen, cereal and Little Caesars $5 Hot and Ready. But don’t spend more than 10-15 percent of your monthly income. (A little tidbit of my own: I find that I spend more at the store the more often I go. Granted, I love to cook, so I also love planning meals, but if you can plan for two-weeks-worth of dinner at a time, then you only need to visit the store twice a month, and this will save you a ton. Trust me.)
7. Finally, we all need some sort of release. All work and no play makes for a miserable life. But entertainment is costly, and should be planned for 15 percent or less of your budget.
Now, you might be saying to yourself, “Is this girl sure she graduated from college … because that adds up to more than 100 percent …” but I know that, don’t worry! These percentages leave room for fluctuation in your monthly spending.
Lastly, ask about dumping some money into an IRA while you’re at it. I’m all about storing away some funds and watching them grow, and they will do just that in an IRA account.
Lindsey Hobbs is an online marketing strategist at Champion Real Estate Services, a large corporate real estate company in Columbus, Ohio. She is a 2013 graduate of Otterbein University in Westerville, Ohio in journalism and public relations and is a proud past PRSSA president and current member of Central Ohio PRSA. She blogs at the614project.com and can be found on Twitter at @hobbsie11 and email@example.com.