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Financial Independence: A Syllabus for Life After College

Being financially independent for the first time comes with its ups and downs.  It is a new beginning that will set the course for the rest of your life.  Getting started on the right foot will help you achieve your larger goals in life.  By following these easy steps you will be on your way to having success in your financial independence!

·  Create a budget.  A budget shows how much you earn, where you spend money, and how much you have left over.  If you spend more than you earn, you’ll need to identify areas where you can cut back.  It is important to distinguish between your needs vs. wants.  Monitoring spending will help you achieve your goals. 

·  Start saving now! Even if it’s a small amount, try saving at least $2 each day. At the end of the month you will probably have about $60 to deposit into your savings account. That adds up to $720 a year! Developing good saving habits early on will benefit you later in life. 

·  Look at “savings” as an expense in your budget.  Make saving a priority over spending for things such as a movies or eating out.  Break costly habits like Starbucks or expensive clothes. Instead, put that money into your savings account and watch your money grow.

·  Create an emergency fund.  There are things in life you can’t control, but need to consider, like car repairs, medical expenses, unemployment, etc. Take baby steps with the end goal of having 3-6 months of living expenses in your emergency fund. Doing so will eliminate the need to borrow money in an emergency.

·  Be responsible with your credit cards. While having a credit card is an important step to start building a credit history, it will damage your credit unless you use good credit card etiquette. This includes having a minimal number of credit cards, paying off the full balance each month, and keeping tabs on spending.  Late payments will hurt your credit and can affect future purchases such as buying a car or a home.

·  Utilize free online tools.  There are many easy to use tools like Mint.com. Mint lets you track your cash flow, view account balances, create budgets, and much more.  Utilize online tools to get a better grasp of your financial picture.

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