How to Save Money on Your First Salary

Getting offered your first salary is a major achievement, and you should be excited that you’ve gotten one step closer to your dream job. But most recent graduates don’t earn enough to cover the total cost of living on their own. This means you’ll either find yourself back at home with your family, living with roommates or cutting corners to make ends meet by yourself. It can be difficult to juggle all the financial responsibilities of adulthood on entry-level pay, but there are some ways you can save as you gain experience and grow your earning potential.

Tackle Student Loan Debt Head-On

Don’t just assume you have to live with student loans until you’re rich enough to pay them off. You can look into refinancing your student loans to come up with extra money. This is a long-term solution that will leave more leftover in your bank account each month. It’s better than a one-off solution, and you can make your payments much more affordable without having to worry about skimping in other areas of your life.

Student loan repayment can also be customized to suit your budget. Federal loans can be set on income driven repayment plans, which means that your monthly payment will be calculated based on your adjusted gross income. In other words, you won’t be forced to pay more than you can really afford after taxes, insurance and other expenses are deducted from your earnings.

Consider Downsizing

Selling some of your old furniture and belongings can put more money in your pocket without any real effort on your part. Go through your closet and see what you could put up for sale online, whether it’s clothes, books, old video games and anything else you can think of are able to be sold online. In addition to earning some extra cash, you also get to declutter and enjoy a cleaner home.

It may also be helpful to think about your rent. For some people, looking for different rooms or even moving back home temporarily can be a huge help during the early years of their career. You may not necessarily like the idea of adding 30 minutes to your morning commute, but if it saves you $200 or more a month, it could be worth it for a year or two.

Consider Savings an Essential Expense

Rather than hoping you have money left over each paycheck, make savings a priority. Commit yourself to saving at least $10 to $25 a week, no matter what. Having a concrete figure in your head will make it easier to visualize your savings. Instead of writing off another Starbucks run as no big deal, you’ll think twice about spending extra money. The goal is to become more mindful about how you spend your discretionary income.

Many young adults figure whatever amount of money that doesn’t go to rent, transportation and food is a free for all. This results in a constant cycle of living paycheck to paycheck. You can avoid adopting this habit by building money management skills now. Look at your savings as an investment, not an obligation. You can even break up your savings and set specific goals for things like getting your own apartment, paying off your cellphone or buying a new car. Not to mention the purchase of Dogecoin, Bitcoin, or another cryptocurrency.

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