Issue link: https://read.uberflip.com/i/1499227
Personal Finance Tips. 1 Graduating college and starting your first job comes with a list of milestones such as renting an apartment, buying a car, paying off student loans, or creating a 401(k) account. Balancing all of these different opportunities also comes with financial decisions and a need for personal finance knowledge. By following these tips, you may be more prepared for additional financial milestones down the road such as purchasing a house. Create a budget Without understanding how much money you make and how much you spend, it can be difficult to implement additional personal finance tactics. A popular budgeting rule is the 50/30/20 which encourages 50% of your budget to be put toward essentials including rent, utilities, student loan payments, commuting costs and health needs. With the remaining budget, 20% should be put toward savings in a 401(k) account or emergency fund and 30% can go toward nonessential spending including travel or shopping. Using this rule, or another budgeting strategy that works for you, will help you visualize where your money is going and control expenses. Plan student loan payments Upon graduating, be sure your loan servicer has your updated information on hand for your payments. When deciding how much to pay each month refer to your budget to learn how much is available. Perhaps you have extra money in your budget that you would rather put toward loan repayments ahead of other spending opportunities. Many people also consider different payment methods such as the avalanche method in which you pay off debt with higher interest rates first. Another popular offering is enrolling in auto pay to assure payments are made to your servicer on time. Save for retirement Retirement may seem too far away to think about when beginning your career, but the earlier you start the sooner you will begin taking advantage of compound returns. A 401(k) is an employer provided retirement plan that has the ability to deduct savings directly from your paycheck. Many companies also offer matching on contributions to a specified amount which increases the amount you have saved the moment you begin saving to this account. While saving at the same time as paying off debt and finding a job may seem intimidating, beginning the process earlier can establish good habits and may lead to larger saving when you reach retirement age. Start building credit Your credit score will determine your ability to complete many tasks such as renting an apartment, putting a down payment on a house, being approved for a car loan, or opening a new credit card. A credit score takes into account multiple factors including your ability to pay your balance on time, the amount of credit you use compared to your limit, the amount of time you've had credit, how often you open new accounts, and the variety of credit products you have. By keeping these factors in mind and keeping your credit score high, you will have access to a larger variety of credit cards with more rewards making your financing easier. Learn about investing Once you have saved enough money that you feel comfortable, you can also begin considering investment strategies. Money can be placed in other locations including stocks or bonds outside of your standard checking or savings accounts. Although this brings risk to your earnings and could result in a loss of funds, greater risk can also bring greater reward. By understanding investment opportunities you will learn how to leverage risk to help you reach long term financial goals.