3 Money Tips for New Grads Getting By on a Starting Salary

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For many new college graduates -- the ones who found jobs -- this season marks the start of life in the real world. If you're among them, you may be excited about finally earning a significant salary -- but don't get too carried away.

The real world tends to cost quite a bit to live in, and you need to start thinking about how you'll properly manage your money. That means staying within your budget and spending less than you make (even if you're not making much right now). Here are three tips to make that happen:

1. Start by Building Up Your Savings

If you want to choose one rule to live by, it should be this: Expect the unexpected. Stuff invariably happens that's out of your control, but those events don't have to throw you completely off track. How you respond to what's happening around you is far more important, which is why it's crucial to create a plan.

Everyone needs some sort of financial cushion, or an emergency savings fund. Even if you're just putting away $10 or $20 a week, it will add up over time -- and will come in extremely handy if you're suddenly hit with a big expense you didn't see coming.

An emergency savings fund is going to help you avoid pulling out the credit cards when trouble strikes, and possibly going into debt to cover the costs. Plus, you get the peace of mind that come with knowing you're prepared if a pricey problem does crop up.

If you have student loans, start saving for emergencies while you are in the six-month grace period before your repayment begins.

2. Keep Living Like a College Student for as Long as Possible

Consider living with roommates, renting a smaller (and therefore cheaper) apartment, or even moving in with a family member. There's no shame in moving back in with mom and dad for a year or two if it enables you to save more money and be more financially secure when you do get your own place. Just make sure you're helping out at home in whatever way you can. (In other words, offer to pay rent, clean, cook or do other chores.)

%VIRTUAL-article-sponsoredlinks%Avoid big -- and unnecessary -- purchases. Sorry to break it to you, but you don't need a new car (complete with monthly car payment) when your old one runs just fine. What you need is something to get you from Point A to Point B, and if your current ride manages that, avoid taking on debt to buy something that could get dinged in a parking lot two weeks after you buy it. (Not to mention the fact that a new car loses 20 percent of its value the moment you drive away from the dealership, and a lot more soon after.) Think financial planners all drive fancy BMWs? Think again.

Embrace thriftiness, No, this doesn't mean be cheap. It simply means making an effort to be less wasteful and more resourceful. It also means recognizing that you don't need as much as you might think to be happy. Too often, we spend money as a default choice -- like eating when we're bored. So skip the restaurants or takeout menus, and cook at home more often. Spend more time enjoying free activities rather than engaging in shopping sprees for stuff you don't really need.

3. Take Advantage of Your Employee Benefits

Your starting salary may feel small, but don't forget that your company is compensating you for your time and effort in ways beyond simply handing you a paycheck.

Read over your company benefits and understand all the offers that are on the table. For example, if you're offered an employee-sponsored retirement plan -- usually a 401(k) -- that comes with a company match, jump on that fast. The company match is free money. If there are options that allow you to set aside pretax money to spend on things you're already going to be spending it on -- do it. Again, any money you can avoid sending to the IRS equals free cash in your pocket.

Your company benefits can easily save you thousands of dollars each year, which can only help you stay on budget in other areas of your life.

Sophia Bera is a financial planner for millennials and the founder of Gen Y Planning. You can sign up for the Gen Y Planning newsletter for more tips on millennials and money.
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