5 answers
Maria
Student
Issaquah, Washington
2
Questions
Asked
351 views
How should I handle my finances when I graduate and head on to college?
I want to be able to know how to save money properly and what is valuable information I should know when renting my first apartment or so, I don't want to go into any kind of debt!
Login to comment
5 answers
Evin Nisan
Program/Operations Management
5
Answers
Forsyth, Missouri
Updated
Evin’s Answer
Hey Maria, you have got a couple great answers already. Below I share my opinions, not in any way professional financial advice but just what I have learned through experience.
I want to echo Tyler's advice on saving. It is important to save early and save often. The younger you are, the more advantage you can take of compounding interest. (If you save $100 at 10% a year, in year 1 you get $10 of interest, now you have $110, year 2 you get $11, and so on and so forth). If you utilize a Roth IRA, like Tyler mentioned, your growth is tax free. Remember that it will grow a LOT.. so utilize that early on in life for a HUGE advantage later on!
There are a lot of good resources to listen to ... Dave Ramsey is very popular as he exposes the dangers of debt. Personally, I listen to The Money Guys on Youtube... They are great because, in my opinion, they provide balanced advice for all age groups and income situations!
Like David said, the basic tool to master is a budget. You need to know how much money you have coming in, how much money you have going out, and where you could/should make adjustments. You want to avoid "being in the red" at all costs (spending more than you make).
If you utilize a credit card (no, credit cards are not the devil!) just make sure you use it wisely. Don't use a credit card, like many do, to "borrow from yourself" - that is to say, "I get paid Friday so I can just buy this today" .. that can be a slippery slope of falling into debt! Only ever spend the money you have that you have earmarked for that type of spending. Want to go see a movie with friends? No problem, as long as you have the money in your "Fun Money" category to spend! Don't dip into your grocery budget for fun, for example. This will help you build credit but also good spending habits - just always treat your money as if it is cash, don't spend more than you have!
If you find yourself having trouble with controlling spending, some people have found a "cash only" or "envelope" system to be effective. They hold money in cash, toss the credit card, and buy with cash. This forces you to physically "give up your money" and for some can be a psychological tool to help them realize just how much they're spending.
Last but not least... spend wisely... in every aspect of your life. Really question if you need something, if it's worth the money, if in 8 months you will regret it or not. If you find yourself wanting to impulse buy, get a second opinion or sleep on it. Trust me, that thing you wanna buy will be there tomorrow, and the next week. Sales will always happen ... deals will always happen ... dont fall into the FOMO/consumer trap of "buy now or you lose your chance forever!"
I want to echo Tyler's advice on saving. It is important to save early and save often. The younger you are, the more advantage you can take of compounding interest. (If you save $100 at 10% a year, in year 1 you get $10 of interest, now you have $110, year 2 you get $11, and so on and so forth). If you utilize a Roth IRA, like Tyler mentioned, your growth is tax free. Remember that it will grow a LOT.. so utilize that early on in life for a HUGE advantage later on!
There are a lot of good resources to listen to ... Dave Ramsey is very popular as he exposes the dangers of debt. Personally, I listen to The Money Guys on Youtube... They are great because, in my opinion, they provide balanced advice for all age groups and income situations!
Like David said, the basic tool to master is a budget. You need to know how much money you have coming in, how much money you have going out, and where you could/should make adjustments. You want to avoid "being in the red" at all costs (spending more than you make).
If you utilize a credit card (no, credit cards are not the devil!) just make sure you use it wisely. Don't use a credit card, like many do, to "borrow from yourself" - that is to say, "I get paid Friday so I can just buy this today" .. that can be a slippery slope of falling into debt! Only ever spend the money you have that you have earmarked for that type of spending. Want to go see a movie with friends? No problem, as long as you have the money in your "Fun Money" category to spend! Don't dip into your grocery budget for fun, for example. This will help you build credit but also good spending habits - just always treat your money as if it is cash, don't spend more than you have!
If you find yourself having trouble with controlling spending, some people have found a "cash only" or "envelope" system to be effective. They hold money in cash, toss the credit card, and buy with cash. This forces you to physically "give up your money" and for some can be a psychological tool to help them realize just how much they're spending.
Last but not least... spend wisely... in every aspect of your life. Really question if you need something, if it's worth the money, if in 8 months you will regret it or not. If you find yourself wanting to impulse buy, get a second opinion or sleep on it. Trust me, that thing you wanna buy will be there tomorrow, and the next week. Sales will always happen ... deals will always happen ... dont fall into the FOMO/consumer trap of "buy now or you lose your chance forever!"
Tyler White
Account Executive - Tech Sales, Real Estate Investor, Coach
50
Answers
Springville, Utah
Updated
Tyler’s Answer
Finances can be a challenge but I like how you are already thinking ahead wanting to be disciplined in that area. Awareness/desire is often the first step.
I would recommend coming up with a budget that sets aside at least 10% of your money to save into a Roth IRA, Index funds through Vanguard, or more of a short term account like a CD or money market fund.
When renting for the first time I’d look at 3-5 different apartments and find a price that meets in the middle or toward the lower end to help with your goal of staying out of debt.
Here are a few books I’d recommend reading;
-Money Makeover Dave Ramsey
-Richest Man in Babylon
-I will Teach you to be rich
Best of luck!
I would recommend coming up with a budget that sets aside at least 10% of your money to save into a Roth IRA, Index funds through Vanguard, or more of a short term account like a CD or money market fund.
When renting for the first time I’d look at 3-5 different apartments and find a price that meets in the middle or toward the lower end to help with your goal of staying out of debt.
Here are a few books I’d recommend reading;
-Money Makeover Dave Ramsey
-Richest Man in Babylon
-I will Teach you to be rich
Best of luck!
David Chou
Project Management
28
Answers
Los Angeles, California
Updated
David’s Answer
1. Budget Basics
Keep an eye on what you earn and spend using apps like Mint or YNAB. Try the 50/30/20 rule: 50% for needs, 30% for wants, and 20% for savings.
2. Avoid Debt
Only use credit cards if you can pay them off every month. Start an emergency fund with $500 to $1,000.
3. Renting Tips
Aim to spend 30% or less of your income on rent. Understand your lease, security deposit, and what utilities are covered. Take pictures of the apartment's condition before moving in.
4. Smart Saving
Consider a high-yield savings account. Set up automatic transfers to your savings every payday.
Keep an eye on what you earn and spend using apps like Mint or YNAB. Try the 50/30/20 rule: 50% for needs, 30% for wants, and 20% for savings.
2. Avoid Debt
Only use credit cards if you can pay them off every month. Start an emergency fund with $500 to $1,000.
3. Renting Tips
Aim to spend 30% or less of your income on rent. Understand your lease, security deposit, and what utilities are covered. Take pictures of the apartment's condition before moving in.
4. Smart Saving
Consider a high-yield savings account. Set up automatic transfers to your savings every payday.
David Seides
Finance
29
Answers
Alpharetta, Georgia
Updated
David’s Answer
It's great that you are already thinking about how to manage your money to stay out of debt. That is an awesome and achievable goal.
Setting a budget is a good first step. This is basically just a way to estimate what you think you will spend in different "buckets" (like rent, eating, buying clothes, giving money to other, savings, etc.). You can choose whatever buckets you want to use, but make sure you capture all of the things you could spend money on in one of the buckets. The budget should start with how much money you make, and the total spending should equal the amount of money you make.
At first you will probably need to guess at how much to budget in each bucket, and that is ok. What you will do next is to track all of your spending and add the ones into the same "buckets" that you built your budget. Over time, you can then see how your spending patterns match with your budget, and you can adjust your budget the way you want.
If you follow this approach, you will ensure that you know how much money you can spend on things (and where all of your money goes) so you can avoid going into debt.
Setting a budget is a good first step. This is basically just a way to estimate what you think you will spend in different "buckets" (like rent, eating, buying clothes, giving money to other, savings, etc.). You can choose whatever buckets you want to use, but make sure you capture all of the things you could spend money on in one of the buckets. The budget should start with how much money you make, and the total spending should equal the amount of money you make.
At first you will probably need to guess at how much to budget in each bucket, and that is ok. What you will do next is to track all of your spending and add the ones into the same "buckets" that you built your budget. Over time, you can then see how your spending patterns match with your budget, and you can adjust your budget the way you want.
If you follow this approach, you will ensure that you know how much money you can spend on things (and where all of your money goes) so you can avoid going into debt.
David Chou
Project Management
28
Answers
Los Angeles, California
Updated
David’s Answer
Begin by setting up a budget to see how much money you have and where it goes. A simple way to manage your money is the 50/30/20 rule: use 50% for essentials like rent and food, 30% for fun stuff, and save 20%. Try to avoid debt by using credit cards only if you can pay them off every month. It's important to have an emergency fund, even if it's just $500. When looking for a place to rent, make sure the rent is less than 30% of what you earn, read the lease carefully, and find out what utilities are included. Set up automatic savings and consider a high-yield savings account to help your money grow.