Do you have a student who is graduating? Maybe this insight will be of benefit! ~ Sally

Guest Post by Lauren Davidson, a 20-something Millennial building a career

As a soon-to-be college graduate, the idea of earning my first paycheck is both exciting and daunting. It means freedom — and responsibility. While I’m thrilled to have the opportunity to do more things, to have more cash flow, and to not rely on my parents for money, it is a major transition in my life, moving forward in search of my calling. I am moving into my adult life — and I need a budget to match.

The idea of budgeting may seem outdated, especially to those of us who grew up in the age of the internet and apps for everything. Luckily, it doesn’t have to be hard or old-fashioned. Apps like Mint and LearnVest make it easy to figure out how much money you have coming into your accounts — and how much you’re spending. I’m setting up Mint on my phone before graduation, to start the process of learning how to budget — setting myself up for success before I even begin work.

Once I know how much money I’ll have coming in each month, the real fun can begin. It will be time to figure out how much I could spend. First, the necessities: housing, utilities, student loans and other unavoidable expenses. I put together a list of everything that I absolutely have to pay, starting with my student loans. I already figured out if I had private or federal student loans, and whether I have a grace period for these loans (the 6-month period of time between graduation and when you start paying the loans). Although I do have a grace period on some of my loans, I will go ahead and make interest payments on those loans during that time — doing this can substantially cut down on the total amount owed overall. This is a good move, since student loans are my largest form of debt right now. Did you know that the average graduate borrower leaves college with upwards of $28,000 in student debt?

Knowing how much of my budget will be devoted to necessities, I’ll have a better understanding of how much money is left each month. I’ll allocate money for other necessities like groceries and entertainment, and then devote a chunk of money towards savings and retirement. The key for me is to automate both my savings and retirement, which is a painless way to make sure that I am putting away enough to meet my savings and retirement goals. I have learned that the key to a successful retirement is to start saving early — and to put away as much as I can afford each month. By figuring out my budget early on and setting up my account to automatically deposit money each month, I’m making the choice early on to prioritize my retirement savings.

I also took the time to figure out my big picture goals. It can be difficult to know where you want to be in a few years, financially speaking, when you’re just trying to get started in your career. By sitting down and coming up with a list of what I want to achieve, I’ll be able to set up a game plan for success. For me, the most important thing is to pay off my student loans, so I’ll craft my budget around finding extra money each month to put towards my monthly payments.

Learning how to budget fresh out of college can be challenging — but it is very doable with a little planning and preparation.

Guest Post by Lauren Davidson, a Senior at the University of Pennsylvania, double majoring in Communications and English.

http://laurdavidson.com