You Got the Job! Now Save That Dough
Last week, I mentioned the importance of budgeting in my entry-level salary post, so thought it would be helpful to offer a few practical tips on how to save some of the money you’re finally making. I know getting your first “real” paycheck is a momentous occasion, one that usually results in some big, expensive purchase, followed by many other small purchases. Don’t wait until your first ‘account overdrawn’ notice from the bank to start making smart spending decisions. Start with these five:
1. Uncle Sam Wants His Cut
It’s important to remember that taxes are usually taken out of your paycheck before it even reaches your bank account. After federal taxes, state taxes, social security, and Medicare are extracted, you’ll probably take home around 65 percent of your paycheck. Sorry interns, you’re not excluded from taxes either. In some cases, companies won’t take out taxes at all, leaving the workers to pay for them when tax day rolls around. In that case, it’s always best to put aside 30 to 40 percent of your paycheck.
2. It’s Okay To Go Home
Most students cringe at the thought of moving home with their parents after college, but the reality is, most grads do (hey, I am). It’s nothing to be ashamed of. The reality is the majority of college grads don’t graduate with fulltime jobs, let alone jobs that pay very much. If your parents offer your old bedroom back as a temporary solution, consider taking it. If you’re dead set on avoiding your parents’ place, be modest in your apartment selection and double or triple up with roommates. Rent is always cheaper split three ways.
3. Plan Your Meals
The best piece of advice my grandmother ever gave me was “learn how to cook.” Of course she thought knowing my way around a kitchen would land me a husband (ah, Grandma); until that happens, I’ll use my skills in the kitchen to save money. If you work in a city, lunch can cost a fortune, so it’s best to bring a homemade lunch to work with you at least a few days a week.
4. Commute Smarter
Gas money taking a chunk out of your paycheck? If you know someone working around the same area as you, suggest a carpool and split the cost. Also be sure to look into all the public transportation options if you’re commuting into a city. Investing in a bike is another great, eco-friendly alternative if you live close to the office.
5. Wear Your Wardrobe
If you’re like me and can’t resist a sale, it’s a good idea to set a few ground rules to prevent yourself from buying the whole rack. One for the ladies: Don’t buy something if you can’t see yourself wearing it three different ways in more than one season. If the same shirt looks great alone in the summer, under a blazer in the fall, and with a sweater in the winter, it’s a smart purchase. Men: Take advantage of end-of-season sales, like ‘buy one, get one’ deals for standards like khakis, ties, or button-downs. Just because a plain stripped button-down was in Banana Republic’s fall catalog doesn’t mean it won’t look great in the winter