In this episode of A Wiser Retirement Podcast, Casey Smith, Brad Lyons, CFP®, and Michaela Dowdy talk about money management tips for recent college graduates. They also dive into the benefits of building and sticking to a budget.

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SUMMARY:

Money Management Tips for Recent College Graduates

Once you graduate, there is always a question looming through the air, what now? How do I manage my finances upon graduation? Creating a budget is one way to keep track of everything you have and where your money goes. If you get a new job and move to a city, it is a good idea to look at costs and make a budget based on that. Understanding your cash flows and making sure every dollar has a purpose is the key to success in your 20s.

Another important thing is to make sure your goals are realistic. Don’t start out with huge goals, start small and work your way up. When you start with smaller, more attainable goals for you and your money, it encourages long-term behavior of achieving bigger goals down the road.

A Budget is Not a Restriction

There is often a stigma around budgeting, that it is restrictive and negative. However, it is just the opposite. Creating a budget can help you feel more confident and carefree when spending your money because you know where it is going. Budgeting isn’t restrictive, your salary is. Your budget is there so that your salary doesn’t limit you as much.

Look at what you make, then look at your needs and your wants. Create your budget with that. Your 20s is the time to have fun and experience things, so don’t think you need to take those things out of your budget. Assign every dollar a purpose to allow yourself to spend freely knowing you’ve already paid yourself.

Create Financial Goals for Yourself

It’s always important to create goals for yourself financially. One goal you should have in your 20s is to enter your 30s debt free. Try to pay off things like student loans and a car payment, that way when you are looking to make a larger purchase like buying a home, you won’t have other loans hanging over you. You never want to get into a habit of becoming a slave to payments.

Another thing you should strive for in your 20s is to start saving for retirement. Whether that be work retirement plans, 401k, or even target funds, focus on starting to save as early as you can. A lot of people think that they don’t need to start saving until they make more money, but this is wrong because compounding interest starts accruing no matter how much money you have saved. This can really help you in the long run.

Podcast Episodes Mentioned:

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TIMESTAMPS:

0:00 Intro

1:00 Money Management Tips for Recent College Graduates

7:42 A Budget is Not a Restriction

11:09 Create Goals

16:15 Podcasts to Reference & Youtube to Reference

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