When you are fresh out of school with few financial obligations, a budget may not be a top priority. However, as you acquire debt like a home, vehicles and more a budget can be a great tool to help you manage your finances! Creating a budget doesn’t have to be intimidating. Check out these few tips to help you get started…
When you’re right out of college and don’t have a ton of large bills, budgeting doesn’t really seem like a priority. If you see something you like, you just buy it. But after a couple of years (hopefully) you start to realize how important it is to plan for the future and really take hold of your finances. If you or someone you know doesn’t budget well, here are a few easy ways to get started…
Housing: As you can imagine this category will be a be large portion of your budget. If you’re a homeowner, along with the mortgage, insurance and property taxes, make sure you include necessary utilities like gas and electric, and some extra cash for any emergency repairs.
Transportation: When it comes to transportation, there’s a lot more than just your car payment. Gas, insurance, and preventative maintenance like oil changes should also be included. This is another area where it’s a good idea to include some extra cash for any repairs you may not see coming. Planning ahead will help keep your car on the road, which will keep money in your pocket.
Life: This will cover a lot. Food, health insurance, medicine, clothing, entertainment, wireless, tuition, childcare, etc. All of these things will add up to a sizable portion of your budget, so if separating some of these into their own category will help you keep a closer eye on things, go for it.
Debt and Savings: This final category is one of the most important. Saving money for you future (401k, Roth) is something you want to make sure you’re doing every month. The earlier you start, the better. You’ll be surprised how a little each month can add up when you make use of compound interest. Also, make sure you’re steadily paying down your debt so you can enjoy the freedom you’ll feel when that’s accomplished.