With graduation season underway, young adults are gearing up for a career and paying close attention to their personal finances. While sticking to a budget can be challenging, the good news is more young adults are becoming financially conservative.
According to a recent study by the financial startup SaveUp.com, young adults ages 22 to 32 are saving more money and paying down 57 percent more student loan debt than generation X or baby boomers.
Here are six ways to jumpstart savings behaviors for recent college grads.
1. Create a realistic budget. When it's time to move off campus for a new job, it's also time to update your budget. Review your spending habits, and adjust your budget to account for new expenses, such as your commute, food and entertainment activities. Making room for a savings account within the expense section of your budget is also a smart financial move.
2. Get a summer job. If you want to build up your savings account as quickly as possible, consider getting a second job over the summer. Skipping some of those beach parties and vacations in favor of earning more income can help build up your resume, and boost your savings account. Even just a weekend job can bring in extra cash - and could make the transition to the professional workforce easier.
3. Enjoy free activities during the summer. Spend less on eating out, concerts and road trips over the summer, and venture out to enjoy free local events and activities. These functions can be a great way to meet new people - without blowing a ton of money. New grads who are currently on the job hunt and have a lot of free time should consider finding a no-cost hobby (e.g., hiking) to stay busy while exploring new skills and talents.
4. Be strategic about a car purchase. While it's tempting to sign a car lease or splurge on the latest model of a vehicle you wanted throughout college, consider the benefits of buying a used vehicle. Shop around for a vehicle that you can afford, so you won't have to struggle to make car payments during your first job, and sock away more money into savings.
5. Scale back on discretionary spending. A few shopping sprees or frivolous purchases each month can put a dent in your finances, as well as fuel a bad habit. Make a plan to cut back on unnecessary spending as you transition into the workforce, so that you aren't accumulating debt just to keep up with the latest trends. Some easy places to cut costs include buying coffee, eating out and traveling without a budget. Save money whenever possible, and when you start earning a paycheck, make room for luxury expenses in your new budget.
6. Sell items for cash. Take inventory of your possessions, and consider hosting a yard sale, posting items for sale on Craigslist or selling items on eBay. Everything from laptops to furniture can generate quick cash, which you can put directly into a savings account.
Sabah Karimi is a winner of the Yahoo! Contributor Award and a writer for Wise Bread, where you can find more helpful financial tips for new graduates.
- Personal Budgeting
- Banking & Budgeting