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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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Last Updated on January 21, 2020

How to Develop a Millionaire Mindset in 6 Simple Steps

How to Develop a Millionaire Mindset in 6 Simple Steps

We all like to dream about being financially wealthy. For most people though, it remains a dream and nothing more. Why is that?

It’s because most people don’t set their mind to achieving that goal. They might not be happy in their current situation but they’re comfortable – and comfort is one of the biggest enemies of growth.

How do you go about developing that millionaire mindset? By following these simple steps:

1. Focus On What You Want – And Take It!

So many people are too timid to admit they want something and go for it. When there is something that you want to accomplish don’t think “I could never actually do that”, think “I could do that and I WILL do that”.

Millionaires play to win, not to avoid defeat.

This doesn’t mean to have to become a selfish jerk. What it means is becoming more assertive and honest with yourself. You don’t have to grab off other people. There is a big pot of unclaimed gold in the middle of the table — why shouldn’t you be the one to claim it? You deserve it!

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2. Become Goal-Orientated

It’s almost impossible to achieve anything if you don’t set firm goals. Only lottery winners become millionaires overnight. By setting yourself attainable goals, you will get there eventually. Don’t try to get rich quickly — get rich slowly.

Let’s take the idea of making your first million dollars and expand on what kind of goals you might set to get there. Let’s also say you’re starting at a break-even position – you’re making enough to get by with a few luxuries, but nothing more.

Your goal for the first year can be having $10,000 in the bank within a year. It won’t be easy but it is doable. Next, you need to figure out the steps you need to take to achieve that goal.

Always look at ways to make growth before cutbacks. With that in mind, you might want to see if you can negotiate a pay rise with your boss, or if there’s another job out there that will pay better. You might be comfortable in your old job but remember, comfort stunts growth.

You may also have other skills outside of your workplace that you can monetize to boost your bank balance. Maybe you can design websites for people, at a fee of course, or make alterations to clothes.

If this is still not enough to make the money you need to save $10,000 in a year, then it’s time to look at cutbacks. Do you have a bunch of old junk that someone else might love? Sell it! Do you really need to spend $10 on your lunch everyday when you could make your own for a fraction of the cost?

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If you are to become a millionaire, you need to start accumulating money.

Here’re some tips to help you: How to Become Goal Oriented and Achieve More in Life

3. Don’t Spend Your Money – Invest It

The reason you need to accumulate money is for step three. Millionaires tend to be frugal people, and that’s because they know the true value of money is in investing. Being your own boss goes hand-in-hand with becoming a millionaire. You’ll want to quit your regular job at some point.

Stop working for your money and make your money work for you.

Rather than buying yourself a new iPad, that $500 could be used to invest in the stock market. Find the right shares (more on that later), and that money could easily double within a year.

There’s not just the stock market — there’s also property, and your own education.

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4. Never Stop Learning

The best thing you can invest in is yourself.

Once most people leave the education system, they think their learning days are over. Well theirs might be, but yours shouldn’t be. Successful people continually learn and adapt.

Billionaire Warren Buffet estimates that he read at least 100 books on investing before he turned twenty. Most people never read another book after they’ve left school. Who would you rather be?

Learn everything you can about how economics works, how the stocks markets work, how they trend.

Learn new skills. If you have an interest in it, learn everything you can about it. You’d be surprised at how often, seemingly useless skills, can become extremely useful in the right situation.

Start developing the habit of learning continuously: How to Create a Habit of Continuous Learning for a Better You

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5. Think Big

While I advise to start off with small goals, you absolutely should have a big goal in mind. If you have a business idea, then that is your ultimate goal – to start that business and make a success of it. If you want to invest your way to millions of dollars and do little work other than research, then that is your big goal.

There is no shame in not achieving a big goal. If you run a business and aim to make $1 million profit in a year and “only” make $200,000, then you’re still significantly ahead of most people.

Aim for the stars, if you fail you’ll still be over the moon.

6. Enjoy the Attention

To be successful, you have to be willing to promote yourself and enjoy the attention to a certain extent. Now the attention doesn’t need to be on yourself, it could be on your brand, but attention definitely attracts money.

Never be embarrassed to get your name out there. That means finding a spotlight and being brave enough to step right up underneath it.

If you run a business, try contacting the local papers. You’d be surprised at how amenable they often are to running a story about you and your business, and it’s all free publicity.

Above all, remember: You control your own destiny. Push hard enough for anything and you’ll get it.

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Featured photo credit: Austin Distel via unsplash.com

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