It is such an exciting and strange time when you finally graduate from college—especially trying to figure out what to do with your money – if you have any at all.
You are finally an adult in the real world, but your bank account may not agree. It is also a weird time socially when either you or your friends have full-time jobs lined up, could be moving to a brand new city, or are heading back to live back with parents to start the dreaded job search. Whatever you may be doing, try not to be too hard on yourself. We live in some pretty strange times, and all you can do right now is to do your best and take small steps.
Whether you are drowning in college debt or not, getting your finances post-graduation isn’t always easy. But with a few simple tricks and planning tips – you can get your money quickly in order.
1. Pay off debt as fast as you can
Currently, the student debt amount in America for 2020 is now around $1.56 trillion. At the same time, the latest national household debt stands around $13.54 trillion. This is a crisis!
Although student loan is one form of debt, debt is anything owed to someone else, including student loans, car loans, credit cards, and utility bills. A quick way to figure out the amount of debt is to write down all the liabilities or bills that you owe to someone else. An easy way to calculate your total owed debt is to use this excellent debt calculator tool provided by Dave Ramsey’s website. Calculating your liability will quickly tell you how much you owe other people and what you need to pay off.
The best way to get out of debt is to start paying it off! After doing some research on tracking debt, keeping a tracking spreadsheet seems to be the best way to do this. Here are some websites that offer great debt tracking tools for free:
- https://debtfreehappens.com/free-debt-tracker-spreadsheet-pay-off-debt/
- https://debtandcupcakes.com/debt-tracker-spreadsheet/
- https://www.debtfreeforties.com/free-debt-repayment-printables/
2. Create a “loose” budget
There is no right or wrong way to create a perfect budget – but having some way to track your money inflow versus outflow is very important. You should figure out what essential things you need to spend money (like rent) versus what you don’t need to spend on (like a monthly wine subscription).
The reason I said a “loose” budget is because it shouldn’t be something that you have to live by strictly. Living by such a strict budget can create mental stress and worry that is unnecessary. However, just having a simple monthly outline or goal spending number can help. If you know that you shouldn’t be spending more than $50 a month on extra personal items that you don’t need, it could encourage you to possibly skip out on buying those extra shoes. Linked here is a straightforward budget worksheet that clearly outlines your income versus expenses.
Another helpful tip would be to make a “spending diary” either in a personal journal or in a new excel document that clearly outlines the spending date, category, and amount. While this can be a bit more time consuming, it can be beneficial to see what you are spending money on.
3. Get on the apps and start saving!
And no, not the dating apps. But you might need those too.
In this context, I am talking about personal finance apps! There are many helpful personal finance apps out there that make your personal finance life more comfortable and successful. As an adult in my twenties, I have found so many finance apps that genuinely want to help us millennials be better savers. We are fortunate to have access to so many free apps that can help us start saving and investing in just a few minutes – so I encourage you to check them out.
Charles Schwab Intelligent Portfolio
Charles Schwab Intelligent Portfolio is a robo-advisor that does the heavy lifting investment work for you. The portfolio requires a minimum investment of $5,000 but does not have any advisory fees which is a major plus.
Wealthfront
Wealthfront uses technology to make more money on all of your money without any effort from you. With a minimum of $500 investment, you can be invested in periodically rebalanced diversified low-cost index funds. Wealthfront allows you to track specific goals like retirement age and buying a home.
Mint
Mint allows you to be on top of your money to ensure all of your finances are managed in one simple place. Mint links all of your accounts to show one direct balance that makes your finances straightforward and easy.
Marcus
Marcus by Goldman Sachs is an investment platform for high-yield savings accounts. Marcus is a great way for people to save their money with higher rates of return compared to the money sitting in a bank.
These percentages fluctuate based on the economy and the Fed, but here is a comparison of the APY returns as of June 2020.
- Marcus: 1.30%
- Chase: 0.02%
- Citibank: 0.04%
- Wells Fargo: 0.01%
- Bank of America: 0.06%
Wally
Wally, is an app that provides insight into your spending, savings, and overall financial goals that allows you to budget by category while clearly tracking your progress.
Ashley is a finance graduate from the University of San Francisco and currently works at a financial technology startup in San Francisco that is focused on providing affordable and accessible 401(k) retirement plans to other startups and small businesses. Prior to working at a startup, she was an associate at a large private wealth management firm working with high-net-worth clients. She is born and raised in Orange County, CA, and loves spending time at the beach, in a pool, reading, and with her friends.
