How to Save When You’re Just Starting Out

Your college and post-college years can be lean times when it comes to cash flow. Since you’re just jumping into the workforce, you might have a ways to go before you see the paychecks that you daydreamed about in class.

But that doesn’t mean you have to spend your post-college years broke. With the following tips, you’ll be able to put some savings away, continue to have an active social life, and generally stress less over money. Once you’ve mastered the art of financial responsibility, you’ll wonder how you ever went without it.

1. Discover where your money goes

Did you ever have the experience of thinking you had plenty of money in your account, only to find out you’re broke? Here’s a secret: We all have.

Money tends to magically disappear when you don’t have a good idea of where it’s going. Do you know what you spend your money on? Most of us think we do, but it never fails to surprise when we actually find out.

Fortunately, you can track your spending using a host of apps that link to your checking account. Some of the most popular apps include Mint, which allows you to create budgets and track spending through a variety of categories, and Truebill, which also helps you track expenses, manage recurring charges, and cancel unwanted subscriptions. There’s also Clarity Money (formerly Proper Daily), which goes a bit further by incorporating your credit card spending into the mix. Vantage West Credit Union offers Money Management, which is conveniently accessible via the Vantage West mobile app. It allows you to see all your accounts in one place, budget, create debt payoff plans and set goals to prepare for retirement, all in one place.

2. Budget

Now that you’ve figured out where your money went, it’s time to figure out where it will go next. Create a budget using your preferred method, whether it’s devoting a notebook to your weekly or monthly budget, using a budgeting app, or accessing the budgeting tools available through Vantage West online banking or mobile app.

Start by recording all sources of monthly income, including paychecks, student loan refunds, and any money you might receive from your family. Next, tally up your recurring charges, such as your cell phone, utility, and other monthly bills. You should be left with something after deducting your charges.

Review your purchase history and figure out if you’re spending too much money in any of the categories you’ve set. What would you like to cut out? Adjust appropriately and be sure to leave room for social activities—we all want to be super savers, but it’s best to be realistic and account for recreational spending.

3. Set up autopay and automatic deposits

 Psychologist and author Dan Arielly studied organ donation rates across a group of different countries. He found that high donation countries tended to have opt-out systems, meaning that citizens are automatically registered to be organ donors unless they sign an opt-out form. Conversely, Arielly found that countries with an opt-in system, such as the United States, had lower organ donation rates. The lesson? Positive action is more easily accomplished once you’ve automated the process.

The same goes for money. By scheduling payments automatically, you’ll never be hit with those annoying and costly late fees. And by transferring a portion of your paycheck to a savings account, you’ll see your savings pile up before you’re able to spend them.

4. Curb your impulse buys

Spending has virtually become a pastime around the world and can be a tough habit to kick. Sometimes it just feels good to spend your hard-earned money, but these impulsive feelings only stick around for a short time before you realize you’ve spent money you didn’t have.

According to a study by Slickdeals, Americans spend around $5,400 on impulse buys. That’s enough to buy a used car for all the stuff that most of us don’t even remember buying. Sticking to a budget means resisting impulse buys when you’re out and in the mood to shop. If you’re a shopaholic, leave some money each month in your shopping budget, so you can indulge a little without going over the edge.

5. Use your plastic strategically and carry cash

Using a debit or credit card makes it easy to spend. A study by ValuePenguin found that business students asked to bid on Red Sox and Celtics tickets were willing to pay 83% more when paying with a credit card.

At least with cash, when you’re out, you’re out. But using plastic can sometimes cause us to think that, somehow, it’s not real money, especially in the absence of having a budget. One way to resist the sweet siren call of plastic for every single purchase is to carry cash in your wallet and use plastic strategically for planned and budgeted purchases. Giving yourself a specific amount of spending money each week allows you to keep a tangible tally on where you’re spending (and overspending). Nothing sends a clearer signal than an empty wallet.

6. Consider cutting the cord

As tech devices dropped in price over the past decade, one piece of technology stubbornly refused to join the crowd: your cable bill. According to a recent report by Kagan, S&P Global Market Intelligence, consumers saw a 74% increase for cable service since 2000. Add premium channels and that cable bill ends up being one of the most expensive utilities in your home.

With so many streaming options available, from Netflix to Hulu to Amazon Prime Video and likely more on the way, there’s no reason to get saddled with a huge cable bill. But be careful about streaming too much—even at $8 to $15 per month, it adds up if you’re binging on streaming services. Keep in mind that one service has enough content to entertain you for five lifetimes.

7. Cook meals at home

With so many great restaurants in Arizona, it can be tough to say no and choose the kitchen. But food is one of the primary areas where many of us get carried away. According to the Bureau of Labor Statistics, Americans spend over $3,000 per year eating out.

Sure, brown bagging it doesn’t sound exciting but neither does being broke. Instead, consider eating out as a reward for financial stewardship. If you’re able to resist eating out during the week, reward yourself with a nice dinner on the weekend. Being responsible doesn’t mean you don’t get to enjoy yourself.

8. Use credit wisely

Many young adults are eager to build credit. As a result, they might find themselves being enticed by offers for 0% APR (with some tiny fine print). This can and does work well for some borrowers, but it comes with responsibility and a realistic idea of how feasible it will be to pay off that balance in the given timeframe.

When you begin to build your credit, try to budget, so you can pay off the balance in full each month, or at least as much as you can. Paying off the minimum balance on $10,000 can take 30 years and feel like a weight around your neck. You won’t need a ton of purchases to start building credit and not carrying a balance is one of the sweetest joys in life (ask anyone who ever ran up debt and paid it off).

While these tips probably won’t make you rich, they will counteract some of the financial anxiety that impacts two-thirds of Americans. Good financial habits start early, but once you’ve mastered them, you’ll be on the path to financial prosperity.

These tips are provided by Vantage West Credit Union. Vantage West is Federally Insured by NCUA.