Saving money may seem difficult as a new professional. You might find yourself earning entry level wages or perhaps you’re in the process of paying off your student loans and the majority of your paycheck goes towards your loan payments. A quick search on Google or Pinterest will bring up a ton of budgeting strategies you can use to get closer to your savings goals. The funny thing about saving money though, whether you feel that you can save right now or not, is that it's more about attitude than the money itself. Here’s how to create your first job budget and save some of the money you earn.
Budgeting Strategies For Your First Job
Open A Savings Account –If you don’t have a savings account at a bank already, you need to open one ASAP. This is step one in a smart, first job budget. Not only will having a savings account allow you to put your money into a safe place, but having a written record of savings will make future “big” purchases easier: when you take out loans for cars and homes lenders look at your financial record to see if you can get approved! While you’re at it, you should also open a checking account. When you start collecting your paychecks, you’ll be able to deposit them at the bank and divide your pay between the two. Checking money should hold the money you’ll need for necessities like rent. Your savings account should be reserved for your excess funds.
Create a Personal Budget – Creating a budget is one of the most important budgeting strategies. Seeing how much money you spend on necessary expenses (rent, car insurance, groceries, etc.) vs. those “extra” expenses (a new Becca palette, happy hour drinks, etc.) can be shocking. (Consider yourself warned.) Outlining your actual spending habits will help you design a first job budget that fits your needs. Sticking to a budgeting strategy is one sure way to help identify the areas that you could save vs. spend. For example, if you find yourself buying that morning cup of coffee at your favorite coffee shop, you could be spending $5 each day on just coffee. This habit will set you back about $1,825 per year. Instead of treating yourself to a caramel latte every day, make your coffee at home or only treat yourself once a week. This will cut your expenses significantly and will let you put some of this “splurge” money into your savings account.
A Tip a Day – One of the easiest ways to get into the saving money mindset without breaking the bank is by saving your tips. Simply stash away a portion of your daily tips into a special jar (this could be something simple like a mason jar or you can pick up a “piggy bank” at a department store.) At the end of the week, take your jar to the bank and deposit the money into your savings account. This way, you will be less tempted to take a few dollars for lunch or a quick coffee break. Even if you start with stashing away a few dollars a day, this will get you in the habit of saving: this is key to maintaining a successful first job budget. The great thing about saving a portion of your tips is that you can increase the amount at any time. As you earn more, you can save more. Trust me: it all adds up!
Brown-Bag It –This is a classic money saving strategy. By simply bringing your lunch to work you can cut your cost by $2,500 a year. (Just imagine what you can do with that much cash!) Don’t believe you’ll save that much? Track how much you spend on food and drink in one week. If you find yourself grabbing that quick lunch you’re probably spending an average of $10.00 per day. Check out these 10 healthy lunches you can make at home to get started.
These are only four budgeting strategies you can use to kick start a lifetime habit of smart saving. When you get your first paycheck, it can be very tempting to splurge on something you’ve had your eye on for a while. As much as you might deserve this treat, try to keep your sights set on the future and create your first job budget before you buy anything. We promise: saving a portion of each paycheck will be well worth it when you can cash in your savings for your dream car, perfect condo, or the start-up supplies for your very own salon.
Photo: Shutterstock | Who Is Danny
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Patti Wanamaker currently serves as an Academic Trainer for Milady. She is responsible for developing and delivering academic and business programs for the Cosmetology Industry. Her intimate understanding of the salon/school/beauty industry comes from 21 years of hands-on experience, includes 8 years of salon/spa ownership, co-owner and co-manager of three salon locations with an annual sales of $5 million. She has 13 years’ experience as a multi-faceted, training specialist within the industry. Her experience in all three areas of the beauty and wellness industry allows her to think outside the box and develop innovative trainings that are not only inspirational, but that get down to business, the business of empowering industry professionals to a new levels of success.