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Young Money: the inherent worries of a Champagne lifestyle on a Blue Light budget

blog by Caitlin Campbell McNulty  • 

So you’ve graduated from college, got your first big kid job and are living a Champagne life on a Blue Light budget. What’s a little credit card debt when you have your whole life in front of you, right?

Wrong. As a recent grad, I’m guessing that you have a pile of student loans and maybe already started building up credit card debit while still in school. What you think may not hurt you right now could come back to haunt you in just a few years.

Putting aside the shaky job market, there are plenty of reasons why even though you’re a thrillionaire now, it pays to save. It may not be on your radar screen, but one day you may wish you had a rainy day fund set aside for that once-in-a-lifetime vacation, the house you want to buy, that cross-country move or just one of those surprise expenses life enjoys springing on us.

How do you get there? Start with a budget.

Pick a month and review your bank statement line by line to get an idea of where you spend your money and what you spend it on the most. Do you really know how much you spend at Starbucks each week? Once you find out, that latte may not taste as delightfully foamy anymore—it may taste like hundreds of dollars pureed into a paper cup. Try making coffee at home. A Kuerig might be an expensive investment up front, but the cost savings throughout the year from brewing an easy one cup in your kitchen will make up for the initial output.

Once you know how much you’re spending—and where—you can take a look at what’s necessary (things like utilities, rent/mortgage, car insurance, etc.) and what’s extra (dining out, happy hours, weekly shopping sprees, etc.). Once you figure out what you have left each month after your necessities, you can determine how much is reasonable to spend on the fun stuff. I’m not saying you have to live like a pauper—just make sure your miscellaneous spending is not excessive.

Always include money—even if it’s a small nominal amount at first—in your budget each month for savings and retirement or investment. Each time you get a raise, put a certain portion of the amount aside for savings before it even hits your bank account for the first time. You shouldn’t miss what isn’t there.

At times, life on a budget may get overwhelming and you’ll wish you could just throw caution to the wind and have an epic night of carefree spending. Trust me—your fiscal hangover lasts much longer than the booze-related one. Make a plan. Vow to stick to it. See your way through.

While I am by no means a financial expert, common sense and hard work have helped me attain my goals. By giving myself an objective, prioritizing what’s most important to me and even rewarding myself with treats along the way so I don’t get discouraged, I was able to afford my dream honeymoon, buy my first home and enjoy some of life’s simple pleasures without breaking the bank.

Take time today to set yourself up for financial success. The next time you swipe your card at the store, you won’t have to worry if the purchase will go through. And that, my friends, is a feeling that is worth it’s weight in gold.

Have questions about life as a young pro in Western New York? Email me at .(JavaScript must be enabled to view this email address) for answers in an upcoming edition of the young money blog. 

Photo from Flickr / spaceodissey

TAGGED: caitlin campbell mcnulty, financial advice, money, savings, young money

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