Good morning, Good afternoon, and Good evening folks!
Today, we are going to dive into the world, the real world that is, of the many costs of living on your own after graduating from college! We’ll cover the most common expenses as well as a few outside variables to consider and I’ll even include my own tips when it comes to cutting down that monthly budget.
Before we go on… Budgeting. It’s the most valuable skill an adult can have in this day and age where everything we do has an unfortunate link (and burden) to money. Thankfully there are some great applications out there to help keep an eye on all of your bank accounts, credit cards, loans, and spending all in one place!
My recommendation, and this is truly a must for everyone, is the app Mint by Intuit. If Intuit sounds familiar maybe you’ve used a well known website of theirs called TurboTax! Yes the same people who help make filing your taxes a breeze also have an amazing app for keeping all of your budgeting needs. Mint allows you to connect your bank accounts, credit cards, retirement accounts, and more all in one place. Now instead of logging into your accounts one by one, you just pull out the Mint app and everything appears in one easy-to-read, easy-to-navigate menu! It also allows you to set a monthly spending log to help keep track of spending in a variety of categories. It even provides a monthly update on your current credit score which is important to know when applying for credit cards, housing, loans, etc. The best part is that this app is FREE so there’s absolutely no reason why you shouldn’t download it and give it a try!
Download Mint Today!
Ok, now onto the expenses!
Now that you’re all done with college and ready to move onto conquering the world, you’re going to need a base of operations. Whether it’s a one bedroom for yourself or a two bed that you plan on having a roommate with, factoring in your rent will more than likely be the majority of your monthly spending. One bedrooms can run anywhere from $750-$2000 depending on which side of the globe you live on. My advice is that if you can’t pay off your rent with one of your bi-weekly paychecks, it’s probably a little too much. Try to find something cheap and affordable when you’re first starting out, after all you just got out of college. Save the dreams of grandeur and mansions for when you’ve made a career out of your degree (or a career out of your blog ;D).
While we’re on rent, consider all the expenses that come with it. Utilities, renter’s insurance, internet, and possibly pet expenses! Utilities will usually set you back about 10% of your rent. So if you’re paying $900 for rent, consider $90 as a place to start for the price of gas, electric, and water. Renter’s insurance has also become a must for apartment communities and in general. For example, I use Assurant for my renter’s insurance and have four pay periods of $60.25. This covers everything from property damage to robberies. Finally, Internet. I personally use cox’s internet and only internet as I don’t feel the need to have cable when Youtube and Netflix provide me with everything I need. Internet can be expensive so consider your options and needs. Cox is the most well known but other companies like Centurylink and Xfinity provide much cheaper options. Unfortunately I live in an area where neither are covered yet. An important note before moving on… While I don’t have cable, which reduces my expense through Cox, I do pay for Netflix which is something I need to factor into my monthly expense. Always keep in mind that when you use alternatives that they may have cheaper costs but they need to be factored into your budget nonetheless. The old saying goes, “small bits add up” and that couldn’t be truer when creating a monthly budget.
The next biggest expense you’ll have to consider, plan, and plan again will be your groceries and food expenses. Now this is the part that people tend to find out a lot about themselves. What you buy from the grocery store, the meals you have to go, the fast food, the Starbucks runs, all of this add up to an expense that most people can’t seem to stay strict on because of their stomachs. My advice on this is to make a plan and stick with it. Have a list of items that you always get from the grocery store, pick 4 or 5 times that you’ll allow yourself to eat out, and try to avoid places that charge too much for food. Yes Whole Foods is awesome.. but in a recent experiment I found that I could get the exact same Items from Trader Joe’s at about $32 less. If you can make it work, then by all means go for it.
Next up is Car expenses. Now some will have car loans that they are paying off, but some may not. Briefly, I’d say try to keep the car payments below $300. I know the 2017 model looks really nice but you need to live cheaply and that means not shelling out all your money on a really nice thing. That goes doubly so for cars seeing as a myriad of problems can happen and then you’re left paying for issues you didn’t (and couldn’t have) planned for. Beside car loans, there’s insurance and gas to pay for. I myself have found Geico to be very good for insurance as I only pay $90 a month, although I’m sure there’s plenty of companies out there where you can get a better deal. I also only end up paying $80 for gas a month thanks to the fact I drive a car good with good mileage (All my Ford Fusions say HEYY!!!). My advice on this is find a car with good MPG, good reviews, and won’t cost you a fortune… a fortune that last 72 months at $300 a month. Good MPG will reduce the needs for gas and a good track record will end up being favorable to insurance companies, further reducing the cost of insurance. So strap into those Toyota Corollas and get comfortable!
There is also phone payments. Some of you may be lucky enough to still be on your family’s plan but consider that the newest Iphone 7 will cost $649 – $769 which can be divided up into monthly costs. There’s also the cost of the carrier (ATT, Verizon, Etc). You’re looking at costs exceeding the $60 range, though I’m sure you can find a carrier that will be a little fairer towards recent grads as well.
Lastly I want to go over some miscellaneous expenses that are a common but uncommon as well. The first is a gym membership which, let’s be honest, everyone in America ought to invest in. I’m not saying you have to spend $150 for your local Lifetime, Crossfit gym, or other luxury gym. But finding a quality gym with good equipment that works for your regime is an expense worth adding to the budget. You of course can always workout at a local park or track and stick to bodyweight workouts and save some good money as well! Before moving on, I know that supplements have gained quite a bit of following lately and I want to be the first to tell you that you don’t need to shell out $300 on stacks of supplements. Protein, fish oil, and BCAA’s get me through a month (sometimes two) without going over $100.
You may also set aside some money for those times when you want to buy clothes, buy tech, go travel, fund a business, etc. My overall advice is to plan, plan, PLAN! Know what you’re going to spend ahead of time so you can adjust your budget accordingly. Don’t gravitate towards the most expensive choices and you find something that works. You just graduated from college so I know your smart enough to distinguish between the two.
And now for the Recap!
To put all the expenses to consider in one place;
- Renter’s Insurance
- Internet (and Media)
- Groceries & Food
- Car Loans, Insurance, & Gas
- Phone & Carrier
- Miscellaneous expenses like; Gym Membership, Travel, Clothing, Etc.
Remember that it’s about budgeting properly so that you have a positive cash flow. The more your monthly income increases, the more allowance you can have but you must be strict if you want to get ahead!
Hope you enjoyed this post, if you have any questions, comments, concerns, feel free to shoot me an email at firstname.lastname@example.org
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