Budgeting Tips for Young Professionals
When you start earning a weekly paycheck for the first time it’s important to set budgeting goals. At this stage in your career it can be very easy to get overwhelmed with your personal finances. Over spending on unneeded luxuries will inevitably lead to debt. CreditBox has come up with some budgeting tips for young professionals.
Creating a Budget
The obvious first step to a successful financial future is to identify how much income you are bringing in. Once you have a weekly amount of money you will be able to allocate how much you can use for daily needs and how much you need to save for the future. Categorizing your costs will go a long way in understanding how to set your weekly budget. A few important costs to note are food, rent, clothing, student loans, and entertainment. Also keep in mind that while you may not be making a ton of money you can always put aside money towards your savings.
Need vs. Want
Most young professionals are on a rather tight budget. This makes it crucial to understand the difference between a “need” and a “want”. Some good examples of a need are food, clothing, rent, student loan expenses. On the other hand wants are material objects like buying an Xbox or a big screen TV. While, it would be nice to have these items they are not needed to get you through your daily life. The ability to distinuish items that you need from items you want will go a long way in sticking to your budget.
Don’t Abuse Credit Cards
According to the Journal of Business 83 percent of young professionals have at least one credit card. Credit cards are a great tool to build credit for large future purchase like a car or a home. Unfortunately, credit cards can also get young professionals in a lot of financial trouble. It’s very easy to amass a large amount of debt by overextending yourself financially. A great tip for tracking your credit card use is to set a spending budget at the start of each week and review what you actually spent at the end of each week. Keeping on top of your purchases will help you on your path to a successful financial future.
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