One of the most difficult financial times in your life is when you graduate college and begin living without your parents acting as a financial safety net. Not only that, but you also probably have some good student debt racked up.
This isn’t an easy situation for anyone to deal with, but it is not impossible to get out of this situation as a grown up with less or even no debt. It just takes a little bit of ingenuity, frugality, and foresight.
Your early twenties is an interesting time in your life where you want to do a million things but don’t necessarily have the money to fund all of them. In fact, you probably don’t have the money to fund any of them, especially if you are still working on those.
Live cheap. Don’t just live within your means, but live below them. This, alone, is hard to do. Even if you are saving as much as you possibly could, you might be tempted to use all of your savings to pay off your debt, just to get it off your back, but you shouldn’t put all of your financial eggs in one basket.
A majority of your savings should go to paying off you loans (the faster you pay them off, the less money you will ultimately have to pay because interest accrues over time; more time means more interest), but the rest of your money should go to a rainy day fund.
You never know when you might lose your job or some other kind of expense will come up. But you can always take out a payday loan.
Track your earning and spending. Without second thought about what you spend your money on, you will spend a whole bunch of money. And then at the end of the month when your credit card bill comes, you will wonder where all of your money went.
Don’t let that happen to you. See exactly what you spend on. And keep in mind what you earn. This number should determine how much you spend every month.
With that being said, set a budget! Give yourself a monthly allowance for everything and that means groceries, gas, and fun, and stick to that number. But give yourself more than you think you’ll need. Wiggle room is always a good idea if you can afford it (pun intended).
Just because you encounter a slight hiccup doesn’t mean that you should give up completely. Everyone makes mistakes and your twenties are the best time to learn. Spending a little bit more than you should one month doesn’t mean that you should just throw your budget out the window. Keep your eye on the prize and do better next month.
Don’t sacrifice your credit. The most important thing you can do in your twenties is be smart with your money, and if you do so, your credit will grow in the process. You credit grows when you repay a loan, so continue repaying those student loans and work hard at your job.
Good luck being a grown up!