Budgeting for the 20-something

If you are anything like me the thought of paying back your student loans scares the daylights out of you. Let’s be honest, financial responsibility as a concept is pretty terrifying. And let me tell you from experience, the 6 month period between graduation and beginning repayment absolutely flies by. I have had to completely rework my budget in order to properly function as an adult, so allow me to share some tips.

1. Weigh what you need versus what you want

This is a hard one, because in my mind I need cable, I need more shoes, and I need Chipotle on Fridays. Do you need cable? No, and neither do I. I subscribe to Netflix and Hulu and pay for just internet – this runs me about $40 a month as compared to over $100 I was paying with cable.

In terms of the other stuff, figure out how much money you absolutely need for bills and contingency each month, subtract from monthly income, and give yourself a weekly allowance. I like to have my “allowance” in cash to remind myself not to spend more than this. If I have the money to then I’ll buy shoes or Chipotle, otherwise I power through my less exciting (though much healthier) homemade lunches.

2. Work out a deal with your student loan lender

Sure, calling Sallie Mae ranks up there somewhere around “selling your soul” and “eating slugs” but it can be a benefit! If you have multiple loans through the same lender, and most federal loans are, then you can work out a payment plan that consolidates your loans together. This may not work with private loans, but should definitely work with federal loans. And if you tell them what you can afford each month they will try to get your payments as cheap as they can.

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3. Have a “rainy day” or “VACATION!” fund

This is so important! You need to maintain sanity and some sense of normalcy even when you feel like being an adult is completely overrated and just want to declare bankruptcy, change your name, and move to a deserted island. If I have money left over from my weekly allowance I put it in a jar, along with all of my change; one of my friends saves all of her singles. You will be surprised how much you have when it comes time to plan a vacation. All of that change really adds up!

Yes, suddenly having all of these adult responsibilities to worry about is kind of a drag and may make you nostalgic for the days of “the bank of Mom and Dad” but saving money can be done! I promise, it is possible to pay all of your bills and maybe even vacation without resorting to nightly Ramen noodles.

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