Aw Yeah, Personal Finance!
Politics and Activism

Aw Yeah, Personal Finance!

How to spend your money after graduation and rent and monthlies and food and debt and...

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NOTE: This is just a short rant about basic financial advice. For more advanced things, seek advice from a professional or teach yourself through research online or at your local library.

So you've graduated, gotten your job, and have started making those sweet, sweet stacks (regardless of how small they may be, relative to how much you were making before you had a job, they are still stacks). You're sitting at home, looking at your first paycheck sitting comfortably in your bank account and you suddenly realize that you're not certain that you're spending it correctly. You have no formal or informal training in taking care of your own money, because schools stopped teaching those classes in the late 80s and your parents have always helped you take care of this sort of thing up until now. Well, the beauty of being human is that there's always time to learn, especially now that you are trying to pursue delicious financial independency.

First of all, it's okay to ask for help either in learning or in making it to the next month. Your parents are valuable sources of information and are probably more interested in helping you succeed than watching you fail. Another excellent source is the internet, which is full of solid advice and those willing to lend it. I myself tend to lurk around the personal finance subreddit, picking up tidbits of knowledge to help me reach my monetary goals. Here are some of the things I've picked up.

When it comes to a place to live, try not to spend more than a third of your monthly income between rent and utilities. So if you make $900 a month, no more than $300 of it should be going to housing, unless you can justify giving up an extra $100-200 for a prime location or decent living space. This is also the first expense you should take into account, as the roof over your head is probably the most important asset to your functionality. This price should be set in stone, make sure it's not likely to change at any point during your residency. Make sure your housemates are not going to abandon ship unexpectedly, make sure your landlord is reasonable, and make sure you don't use too much water, electricity, or gas. Keep this amount as constant as possible.

The expenses that allow you to function in society are your cell phone, internet, and car insurance. Most places won't hire you without a way to contact you or a form of reliable transport, and most places' job applications are entirely online now anyways. Do what you can without these until you can afford to regularly upkeep them, and when you can, try and be keep these fees as close to under a third of your monthly income as possible. At this point, I will mention that haggling is acceptable and should be pursued whenever possible. The majority of salespeople are looking to make a sale wherever they can and might be willing to take a hit if it means getting a regular customer. These three fees should also take priority over any monthly fees that are for entertainment purposes.

The last third of your income gets spent in a few ways in order of importance:
1. Food: On a budget, a single person can survive pretty well on about $45 a week, but spend what you feel is appropriate so long as it doesn't extend past a ninth of your income. If you have a medical condition (celiac, primarily), then you should spend a bit more so you can nourish yourself properly.
2. Debt: Pay this off as quickly as possible, but do not starve because of it. If it begins to make you struggle, contact your bank and help them to help you create a plan that will get rid of it. Much like the salespeople, they just want their money, they don't really mind how quickly it comes in.
3. Savings: After food, make sure that a certain amount of your money goes straight into an account that you will not touch except for emergencies or large purchases (which should rarely exceed a tenth of these funds).
4. Hobbies: The things that help you keep your sanity and give you a sense of fulfillment. You can reasonably pursue and sustain up to two of these on a reasonable budget, but one should do you just fine. These are not really a luxury as they help you remain a human being enough to keep going until you arrive at a more ideal situation, and can also help you generate income in some cases.
5. Entertainment and luxuries: Different from hobbies, because entertainment doesn't really fulfill you in the same way, nor does it offer potential money back, and so it takes a lower order of importance.

In the world we live in, your money is your most important resource, second only to air. Treat it with respect and care, put it in the best possible places, and it can help you achieve your goals. Again, there is much much more information on good ways to manage your money, and your access to it is virtually unlimited so long as there's a library nearby or some wifi. Never stop pursuing or improving your financial stability and do whatever it takes to achieve it.

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This article has not been reviewed by Odyssey HQ and solely reflects the ideas and opinions of the creator.
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