Money Magic for Recent Grads

Spoiler alert: The money management tips we’re sharing aren’t actually magic, but they will help keep your money from doing a vanishing act.

After living the life of a poor college student – or one who relied on your parents for income – you’re probably excited about seeing your bank account grow. Maybe your dream job hasn’t come through yet and you’re concerned about a dwindling stash of cash. Either way, these tips and tricks will help you create a budget to meet your current and future needs.

Potential Roadblocks

We’re here to help you leap over three of the most common hurdles in putting together a budget. Do any of these resonate with you?

  1. You’re afraid it will be restrictive and limit spending freedom.
  2. You dread seeing the numbers in black and white.
  3. You think keeping track of your spending is a hassle.

Although the first two items represent different aspects of budgeting, they’re both coming from the same place – apprehension.

In fact, one of the biggest deterrents to effective budgeting is the mindset that it’s designed to prevent you from spending your money or doing anything fun. In reality, the opposite is true. When you can clearly and honestly view your savings, income and expenses, it’s much easier to meet your short- and long-term goals. And not feel guilty about it!

Instead of discussing how to structure a budget, we’re gonna focus on the good stuff like maintaining your social life, celebrating holidays and giving back to others – without busting your budget. Before we can do that, you need to know your numbers.

Start Here

One of the first things you should do is to write down everything you buy, including that soda from the gas station, coffee from the café, mobile app subscriptions or impulse buys in the check-out lane. When money slips through our fingers on small items, it can quickly add up to a substantial sum.

The amount of “lost” money can potentially grow faster when you use a debit or credit card. There’s less emotional connection to your finances when you tap, dip or swipe to buy something. Back when your parents were starting in their careers, they probably paid for most things with a handwritten check or cash, which made each purchase very tangible and impactful.

Regardless of how you pay for your purchases, there are low-tech and high-tech options to keep track of your expenditures. While some people prefer the traditional envelope method, recent grads tends to prefer digital tracking options.  Forbes rounded up five budgeting apps (both free and paid) to help get you started.

Once you’ve chosen how you’ll track your income and expenses, here are some tips to trim your costs without eliminating the fun.

Start Simple. Any new habit can be hard to establish and stick with, so start with something that won’t create a lot of stress. Instead of buying a smoothie at your favorite drive-through, make a smoothie at home which will save you both time and money. Shop around for lower mobile phone rates or look for discounts – a lot of employers offer discounts for a wide range of products and services.

Become a Super Saver. Check out apps and websites that can help you save money or earn rebates. Rakuten (formerly Ebates) and ibotta let you shop online (or via the app) to earn cash back. General discounting sites like Coupons.com, while retailers like book stores, grocery stores and gas stations offer loyalty programs which can help you trim your expenses.

Pay Down That Debt. Whether you have college debt or owe money on credit cards, it’s important to reduce it as soon as you can. Check out these inspirational debt elimination stories from Sarah and Nichol!

Get a Budget Buddy. A lot of people prefer to work out with a gym partner, who can keep them accountable and encourage them when they’re feeling discouraged. A budget buddy can do the same thing, especially if they’re someone you hang out with often. Come up with ways you can socialize on the cheap:

  • Order in and watch Netflix. This eliminates the cost of beverages, tips and the temptation to add on extra items like dessert. Or save even more if you and your friends cook at home.
  • Share clothes, shoes or accessories. It can be fun to change up your wardrobe without buying brand-new pieces if you can swap out items with a friend.
  • Support each other. Make a commitment to checking in to see if you’re both on track for your goals. Talk about your successes and brainstorm new ways to save.
  • Set up a progressive dinner. Start with appetizers at one friend’s house or apartment, have a salad at the next stop, grab the main dish at another friend’s home and wrap the night up with dessert at a restaurant or yet another home. Since the main dish is the most expensive, two or three friends can share the cost of that stop on your progressive dinner.

Create New Traditions. The holidays can get expensive, but there are ways to celebrate birthdays and other important events without going broke or dipping into your savings. Check out these ideas, then add your own!

  • Gift exchange. Instead of buying presents for all of your friends and family, consider drawing names.
  • The gift of you. Another option is to offer gifts of service, like babysitting, golf lessons, a low-cost night out, etc.
  • Serve others. Ask everyone in your friend or family group to forgo presents to contribute whatever they can afford to a charity you all agree on. You can make it even better if you also put some muscle into it by volunteering with that same charity.

Share The Love. One of the greatest joys is in life is supporting others, which is why we recommend including philanthropy as part of your overall budget. A perfect opportunity is just around the corner on December 3rd with Giving Tuesday. This global giving movement encourages people to help others through the gift of their time, donations, goods or voice.

In addition to many wonderful causes that may be close to your heart (cancer research, animal rights or other initiatives), we’d be honored if you’d make a contribution to the program at UIS that has meant the most to you. Sometime between now and Giving Tuesday on December 3rd, please consider donating to one of many different UIS programs, including UIS Scholarship Fund, Illinois Innocence Project, Center for Online Learning, Research, and Service, or Athletics.

Thanks for your generosity – and best wishes as you embark on your new budgeting journey!