Mar 24, 2021 09:54 AM EDT
Tips for Living on Your Own After College Graduation
During college, you might have enjoyed the freedom from living away from your family. So, it might make the thought of moving home less appealing. As with other new stages of your life, living on your own might be exciting yet daunting. Knowing these tips can go a long way toward helping you be successful.
Creating a Budget
Understanding the importance of a budget is essential if you want to succeed. Knowing where your dollars go and helping them work for you will help you make your money work. You'll want to include transportation, bills, rent, personal care, and groceries. You might want to include spending money as well, like dining out or purchasing entertainment. You'll also want to include investing and saving.
If you have student loans, make sure you include your monthly repayments on the budget as well. If you are paying too much in specific areas, find out what happened so you can fix it. For example, if you feel your student loan repayments are too high, look into refinancing them with a private lender. To see if you can save on college debt, you can use a student loan refinancing calculator. That way, you can see how much you might save each month.
Cut Out Subscriptions and Unnecessary Purchases
Once you understand your budget, you can determine whether you need several subscriptions. If you find you do not use the service that much, it might not be worth paying for it. Ask yourself why you want that subscription and work out the cost for each time you use it. For instance, if you pay $12 a month for a particular streaming service but only use it twice a month, you're paying $6 each time.
Look for other alternatives, like copies of that movie or show at your local library. Or you might decide to put those funds toward purchasing digital copies of your favorite shows and films. Look for other areas to save as well, and purchase only those things you need. Instead of going on a shopping spree, set aside a little each month to acquire good-quality items. Delayed gratification helps you stick to your budget, and you can live a simpler life.
Invest and Save as Much as You Can
Many young people miss out on investing, but starting it early is critical. The more you save now, the more interest those funds can accrue. Start by creating an account with at least three to six months of living expenses. Try to set aside at least a quarter of your income each month and split that between short-term and long-term savings.
Setting goals will encourage you to set aside the fund you need. For instance, perhaps you want to retire at an early age or own home while still in your 20s. After you have met your savings goals, you might consider investing your money and making it work for you. Consider stocks and exchange-traded funds to start as you begin to build wealth. By starting your investing journey now, you'll ensure you are financially secure in your later years.
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