![]() ![]() Now, I know there are a ton of really cool apps out there that let you invest with ETFs and whatnot. It's free money, so you'd be a fool to ignore it. I'm not going to go into the intricacies of how it all works, but that money essentially comes out of your check before you see it, gets doubled by your employer, and it's pre-tax, so you basically earn that percentage back on it if you wait until you retire to touch it. So after you've paid down your credit cards - and keep them down - you should look to the future.Īs far as your retirement is concerned, it's simple: whatever your employer matches in a 401k, you should put that amount into it. That's how much you should have to get yourself through three months of no income. Take this budget, subtract your fun money and savings costs from your take home pay, then multiply it by three. The recommendation is to take ten percent of your take home and use it for savings. It's tempting to treat yo'self when you get your first few months of paychecks, but you need to look at how much you need to spend each month to get by and save enough for at least two month's worth. ![]() ![]() But paying your credit cards down has two other benefits: you'll shoot your credit score back up by keeping your utilized credit under 35 percent and you'll simultaneously have an emergency fund to dip into.Īnd speaking of which, savings. Banks absolutely love it when you pay them off and immediately rack them back up again, paying those fees every month. Pay off your damn credit cards and get some emergency savings.Ĭredit cards are not free money - at least not for you. Despite the junk older folks like to talk about those damned irresponsible millennials with their emojis and snap tweets, we're actually a fairly fiscally responsible bunch. This is the area of our budget that differs the most from the usual ones you'll find. This budget is a general guideline for the average college graduate, while acknowledging that there are no unbreakable rules - you're allowed to tweak the ratios, as long as you keep in mind that something's got to give somewhere. The problem with this approach is its rigidity and the fact that it doesn't address the concerns that recent college graduates have, like crippling student loan debt.Īfter all, how much sense does it really make to put your money into a money market account yielding a 1.5 percent return when you've got a private loan accruing at 12 percent? Or to invest in your 401k when your company only matches two percent?Īctually, you should absolutely always do that because it's free money, but you get the point. This is stuff like dining out, gas, and shopping that you can't always set an exact budget for. Flexible Spending - Keep your flex spending that changes from month to month (and your fun money) to no more than 30 percent of your take home cash.Financial Goals - Put at least 20 percent of your take home pay toward important loan payments, retirement, or building your financial security. ![]() We're talking subscriptions to Netflix, rent, gym memberships, insurance, and anything else that you can rely on hitting your bank account on a regular basis.
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