After you graduate and step into the “real world” you may find it to be daunting. You have to change your routine 100% and everything can be overwhelming. Today, we are showing you how to manage joining the cruel world and have an easy first few months.
To keep your finances in order it is important to have a budget. Budgets allow you to see where you came from and where you need to go.
They are a great resource for keeping track of your income and expenses. You can get specific details to make sure you are getting the most out of your money. Tools such as Mint can help you track your spending and make smart decisions as to how you spend your hard-earned money.
Budgets tell you
- If you are paying too much for housing
- If you spend too much money eating out
- And more
If you do not utilize a budget, you will find it close to impossible to reach any of your financial goals.
Continue to Spend Like a College Student
Once you have a budget in place, still spend as if you have to base your meals on ramen noodles. It will be tempting to spend more money since you have a job but you have to resist the urges.
If in college your lifestyle was cheap, remain that way now. The money that you want to spend, consider putting it into an emergency fund, retirement plan, or an account for your first home. By living cheap now, you will be able to enjoy a great lifestyle when you are older.
Take Advantage of Tax Breaks
Recent graduates have numerous tax breaks available to them. It is up to you to make sure you take advantage of them when filing your tax return.
Did you have to more because of your first job and paid for some, or all, of your moving expenses. If so, write it off on your taxes. As long as you moved for work, started work within a year of your move, moved at least 50 miles away from your prior residence, and worked full time for 39 weeks during the first year after the move you are eligible for a deduction.
Student Loan Interest
More than likely you made it through college with the help of student loans. If so, your student loan interest is deductible. As long as you are not a dependent on someone else’s return and file a joint return, if you are married, you can take this deduction. Income wise your deduction phases out at $80,000 or $160,000 for joint returns. It is worth checking into though since you could deduct up to $2,500 of your student loan interest for 2016 and may get you a tax refund.
All of the job-hunting you did can pay off too. Make sure you keep good records because each time you switch jobs you can deduct your job hunting related expenses. Things that fall into this category include, but are not limited to, hiring an employment agency and traveling for interviews.
Being a recent graduate does not mean that you are doomed for failure in the finance department. Follow our advice given today and have a brighter financial future.