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Financial Savvy for Your First Salary

Spring is in the air and with April showers come May graduates, ready (or not) to face life beyond school. For seniors, the real world is just a few weeks away and some might be wondering how they’re going to get by financially.

There are some important practices to keep in mind when building a solid financial future for yourself. Step one is to get a job (I know, easier said than done!), but what about everything after that? Your first job may not pay the big bucks, but there are things you can do now that will literally pay off in dividends down the line. Here are a few things to keep in mind found in the 2013 article from U.S. News & World Report:

When you land a job, find out how you can invest in retirement ASAP.
Look into what retirement options your employer offers and when you can start taking advantage of them. Some employers will match your contribution to your retirement account, so it’s free money for the future. It can be tough when you’re just starting out to put aside money for retirement, but every dollar makes a difference when it comes to the magic of compound interest. Plus you can throw in more money as your salary increases!

Create a budget and stick to it.
Budgets (even if you don’t stick to them perfectly) give you a sense of where your money is going. Mint.com is a neat online budgeting tool that can help you stay on track and monitor your spending. You can even download the Mint app to track your expenses on the go. Mint will categorize your spending to reflect what you buy and track your progress toward big savings goals, like a vacation or a new computer.

Ask yourself, “Do I need this? Or do I just want this?”
Recognize the difference between purchases that are important for the future vs. right now. Sure, a fancy coffee table would be nice for your new apartment, but could a functional $20 table do the trick? Look at it this way: If you’re planning on moving outside of the city at some point, think about what you’ll be carrying with you. If you can survive in the short-term with fewer material things to have money for the bigger, long-term plans, do that.

Learn about your loan repayment options right. now.
Your 18-year-old self may not have thought about exactly how you would pay off your student loans when you started college, but now it’s on you now to figure out how to manage that in your monthly expenses. The BU Office of Financial Assistance has compiled a quick guide on your loan repayment options. And don’t forget about loan forgiveness opportunities! This program doesn’t apply to everyone, but if you’re working in the public sector or with certain high-need populations, you may qualify to have some of your federal loans forgiven after being employed for a certain number of years. Here’s more information from the Federal Student Aid Office about how you can qualify.

Be responsible with your credit card.
Despite what this scene from the TV show Undeclared (Judd Apatow’s early 2000s sitcom about Freshmen surviving college) might make you think, credit cards are not free money. Use a credit card like a debit card – in other words, don’t spend more money than you have in your bank account. Pay off the full balance when you get your credit card statement to avoid expensive fees and high interest rates. Check out this article from U.S. News & Word Report on credit-management for more information.

There’s a lot that you can learn about saving, investing, and being financially savvy. Start now by checking out reputable blogs like Get Rich Slowly and Money Under 30. Pay attention to the financial news stories and, if you’re ready to make big investments, consult a financial adviser. You can never be too informed!

Photo credit Damian Gadal

 

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