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Simple Tips to Manage Spending as a Young Professional

Simple Tips to Manage Spending as a Young Professional

Graduating from school and entering the workforce is an incredible feeling. Not only are you finally done with the initial learning phase of your career, but you’re also FINALLY getting paid for your time rather than paying for classes. Although you’ll miss the football games and the raging house parties, a salary that comes along with a hands-on learning experience is a pretty decent trade-off. The problem is, this newfound income has a habit of giving young professionals a false sense of mega wealth.

If you’ve just graduated and are finally entering the beginning stages of your career, a few tips to manage your spending might help you refrain from overspending with a salary that seems basically limitless compared to the hourly wages of your college job. Here are five simple ways you can effectively manage your spending as a young professional.

1. Use your apps

Our generation is fortunate to have a strong force on our side in terms of budgeting – technology. There is certainly no shortage of apps that can help you track your spending, manage your finances, and even break into the stock market. Here are a few you should check out:

Mint is a popular finance app option among Millennials. This app provides a snapshot of your spending to show you which areas of your life you’re spending most on. It also helps you keep track of your credit score and bill payments.

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Level Money is another fantastic app for budgeting that works a little differently than Mint. Once you connect the app to your bank account, it automatically calculates your income and recurring bills to provide you with suggestions for what your daily, weekly, and monthly spending should be.

If you’re looking for a simple way to start investing, the Acorns app is a fantastic option. This app links up to your bank account to automatically invest your spare change in selected stocks. For example, if I spent $3.50 on a snack, the remaining $.50 would be invested.

2. Set savings goals

One of the most common mistakes Millennials make in terms of spending is to spend everything and save nothing. Starting a solid savings account will come in handy when unexpected expenses come up, but it will be even more important when you need to come up with a down payment to purchase a home or car.

If you’re like most of us and are a bit unsure of where to start saving and how much you should be putting away, the Money for 20s expert at About.com has an awesome guide you should check out for more info.

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3. Figure out salary/raises after taxes

One of the biggest shocks most Millennials face after receiving their first salaried paycheck is realizing how small it actually is in comparison to the monthly figure they came up with in their head after accepting the offer. This is because taxes take out A LOT of the money you think you’ll see each month. To prepare yourself for the actual amount you’ll be making and avoid overspending, you’ll want to calculate your actual earnings after taxes and on a monthly basis.

This can help you understand not only what your monthly pay will be like, but also how big of an impact your raises might actually make on your monthly earnings.

To check out what your salary will really be after taxes, you can use a salary calculator. I found that this one from ADP was accurate while also providing a simple calculation process.

4. Find less expensive entertainment options

If you’ve ever checked out your bank statement after a night out, you know how much a simple night of bar hopping or clubbing can cost you. If you start tracking your spending and realize that you’re spending the bulk of your monthly income on entertainment, it might be time to cut back a little.

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Although this can be exceptionally tough for a young professional with coworkers who like to hit the bars after work or go out for lunches, there are definitely alternative ways to spend time with your coworkers that won’t be quite as detrimental to your wallet.

Instead of going out for drinks one night, maybe consider having a small, potluck style happy hour at your place. If you’re really looking to save, maybe suggest checking out a new hike with your coworkers or taking a trip to the park for ultimate Frisbee instead.

5. Follow budgeting gurus

The final piece of advice I have to offer is to keep an eye out for new money-saving tips and tricks from the financial pros. As the world changes and spending needs change along with it, it’s nice to have some extra support from others who can help you better understand how to stay thrifty and keep your spending in check.

Find a few solid blogs to follow for ongoing information and advice. I highly recommend checking out this resource with a list of some of the top finance blogs in 2016 to make your research a little easier. Once you’ve got a few blogs in mind, check out their social accounts and follow them to keep up on their latest posts. If you’d prefer to check out each site when you have time, you could simply bookmark each blog in your default browser to easily access each one when you’re ready to do some financial reading.

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Now that you’ve been given a few simple steps to save as a young professional, it’s time to part putting them into action. Even if you’ve yet to land a job with a professional salary, it can still be super beneficial to start implementing these tips now to prepare for when you’re managing a larger check.

If you have any additional tips or questions, I’d love to hear them. Let me know in the comments below!

Featured photo credit: iStock via istockphoto.com

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Published on July 4, 2018

Top 10 Recommendations on Money Management Apps

Top 10 Recommendations on Money Management Apps

Don’t want to overspend your budget, swipe your credit card too many times, and feel like a financial mess? Instead of beating yourself up for the bad financial decisions you’ve ever made, create a new plan!

The solution is simple, save more and spend less. But, we all know it’s easier said than done.

One problem is finding quality apps that save you time and money, and aren’t just hype.

Luckily, there’re many great money management apps available at your fingertips. Here are 10 reliable money management apps that can help you save money, and crush debt.

1. Personal Capital

    When was the last time you’ve tracked your net worth? Probably months ago or maybe never. Personal Capital allows you to easily track your net worth and plan for retirement.

    Here are some of its main features:

    • Sync many investment accounts, and expenses (mortgage, credit cards, etc.) in one place
    • Discover hidden fees and how much they’re affecting your retirement plan
    • Wealth management for investors requiring a long-term strategy

    With Personal you’re free to track your expenses and net worth.

    Available for: iOS and Android

    2. Mint

      If your smartphone could only install a few apps, Mint would be one of them. Why? Because Mint tracks all your balances and bills in one place.

      Here are some of its main features:

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      • Effortlessly track all your bills and balances in one dashboard
      • Categorized expenses to understand where you spend your money
      • Uncover hidden fees, and determine your investment style with sophisticated retirement tools.

      Feel at ease with managing your money by a reputable company that isn’t going anywhere.

      Available for: iOS and Android

      3. YNAB

        Everyone needs a budget, there’s no way around it. YNAB (You Need A Budget) is an easy to use app that will change the way you think about money. Their motto is to “give every dollar a job”, and you’ll quickly discover why.

        Here are some of its main features:

        • Easily sync all bank accounts in one place
        • Visually see your debt paying progress with eye-catching charts and notifications
        • Customized categories setting saving goals

        The best part about YNAB is the community that comes along with it. You can hop on the YNAB forum to receive support, listen to the YNAB Podcast or stay tuned for their weekly videos.

        Available for: iOS and Android

        4. Wealthfront

          Albert Einstein once said “compound interest is the eight wonder in the world”, and for a very good reason. The problem is, most people are scared or unwilling to learn the basics of investing. This is why Wealthfront is the perfect solution for the hands-off investors.

          Here are some of its main features:

          • Variety of investment account options including IRA, Roth IRA, and more
          • Your portfolio composed of 7 different asset classes
          • Automatically rebalanced portfolio
          • Daily tax loss harvesting

          Wealthfront is perfect for people requiring investment guidance, or prefer a hands-off solution.

          Available for: iOS and Android

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          5. Clarity Money

            If you’re staying on top of your budget but want to take your finances to the next level, Clarity Money can help you. Clarity Money helps you stay under budget and build a personalized savings plan.

            Here are some of its main features:

            • Easily cancel subscriptions with one click
            • Synchronize bank accounts fast
            • Transfer money effortlessly between different accounts

            Clarity Money isn’t an app that does it all. But, it does make transferring money and canceling subscriptions fast and efficient.

            Available for: iOS and Android

            6. Acorns

              What if there was a way to quickly gain confidence in investing your money, without too much risk? There is, and Acorns is your solution. With Acorns’s technology, you’re able to make investments as small as $5.

              Here are some of its main features:

              • Automatic contribution option
              • Customized portfolio tailored to your needs
              • Low management fees ranging from $1-$2 per month

              Stop wasting dollars on expensive coffee. Instead, invest them towards a brighter financial future.

              Available for: iOS and Android

              7. Albert

                Do you budget by only subtracting your expenses from your income? If so, how would you discover any overpayments or extra money you could save? This is where Albert shines, and it does it all free.

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                Here are some of its main features:

                • Receive notifications for overpayments, hidden fees, and low balances
                • An Automatic budget that’s built around your spending and income
                • Easily track debt and set new financial goals

                While Albert does offer a paid option, most of its core features are FREE. So, what better option to save?

                Available for: iOS

                8. Prism

                  Have you recently forgot to pay a bill because life got in the way? Prism automatically tracks your bills and syncs your bank accounts in one place.

                  Here are some of its main features:

                  • View all your account balances in one glance
                  • Bill due dates are automatically pulled and tracked
                  • Receive early reminders for upcoming bills

                  If your budget is on “fleek” but can’t seem to stay on top of your bills, Prism is your go-to app.

                  Available for: iOS, Android, Windows, Amazon

                  9. Mvelopes

                    Remember hearing about people using envelopes to budget their money? Well, Mvelopes is the new envelope system for this generation. Easily create monthly budgets and track your saving goals.

                    Here are some of its main features:

                    • Connect unlimited bank accounts
                    • Real-time budgeting with auto transaction syncing
                    • Low monthly $4 fee or $40 annual

                    Mvelopes can help you crush debt, save more, and help you stop overspending. With its low monthly fee, it’s worth a try.

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                    Available for: iOS and Android

                    10. Wallaby

                      Most people don’t have time to track their credit card’s changing rewards and interest rates. Because of this, you need help reaping the most of your credit card’s rewards. Wallaby is the app that will help you do just that.

                      Here are some of its main features:

                      • Automatic recommendations for the best credit card to use for each transaction
                      • A friendly user interface, displaying credit cards with their corresponding images
                      • Free to use

                      If you’re using the same credit card to make your purchases, you may be leaving money on the table. Give Wallaby a try if you’re ready to maximize your credit card’s rewards.

                      Available for: iOS and Android

                      Take control of your finances and experience financial freedom

                      Picture yourself staying on budget and saving more money than you’d ever imagined.

                      It took hard work and dedication but you’d finally learned how to manage your money. You have to start taking control of your spending and saving habits.

                      You now have a list of reliable apps that can help you build better money habits, what are you waiting for?

                      Featured photo credit: Pexels via pexels.com

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