Graduating from college is an exciting time: new apartments, new jobs, new relationships, and complete freedom. However, all this new stuff comes with new responsibilities that you might not have had to worry about before.
One of these new responsibilities is handling your money. Recent grads need to learn how to budget their money so they won’t overspend and pay their bills and debt properly.
Are you a recent grad and are confused where to start? Check out this simple budget guide to get you started.
Housing and Utilities
Housing and utilities are probably going to be your biggest expense. A good general rule to follow is that you shouldn’t be spending more than 30% of your monthly income on housing and utilities.
The cost of rent will depend on the location you’re in, the type of residence you’re living in (house, new apartment, old 1-bedroom, etc), how many roommates you have (if you have any), and other factors.
Check out the average rent in various locations in South Africa to determine an area that fits your budget. Consider getting roommates to lower the cost and keep this expensive part of your budget as low as possible.
Besides housing, some other essential expenses include:
- Phone bill
Calculating these costs is a crucial part of learning how to budgeting. You can’t avoid paying these expenses, so understanding how much these things will cost you per month can determine where you live, how much you spend on other things, and other factors of your post-grad life.
Keep these costs down by shopping sales, joining family cell phone plans, taking public transport, and meal planning.
Debt and Savings
Most students come out of University with debt. Whether that’s because of student loans, personal loans, credit cards, or something else, you need to set up a plan to start repaying these debts.
Factor these things into your budget: try and pay off more than the minimum required each month. This can boost your credit score and save you on interest in the long run.
Also, set aside some money each month to put in a savings account. Start saving when you’re young in order to have money in the future for big purchases like cars, homes, etc. It also can’t hurt to have a savings account in case of emergencies (car breaks down, lost laptop, home burgled, etc).
Once you’ve budgeted for all these necessary expenses, you need to give yourself some money for entertainment. Post-grad life isn’t all work; you need some play too!
Budget some money for going to the movies, grabbing drinks with friends, getting a gym membership, subscribing to Netflix, your weekly iced latte, or whatever else makes you happy.
A Simple Budget Guide Will Help You Start Adulthood Right
This is a pretty simple budget guide that gives you a general outline of how to handle your money after college. Hopefully, this makes budgeting a bit less confusing for you recent grads.