My Story: Finances for the Recent College Graduate

contributed by Alice

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I am two years out of college, and although I had a better paying job coming out of school, I also went through a bit of initial financial/cash-flow problems.

I froze my credit cards in ice in the freezer. I could get to them in a financial emergency, but they weren't available for impulse buys.

Every week I went to the ATM and took out the amount I had budgeted for disposable/semi-disposable spending. Since the bank I had then didn't charge fees, this worked out well. I went cash-only on just about everything. At times I stuck a travelers check or blank check in my wallet in case I really came up short. Going cash only made me think about can I wait another week or two to buy this, and do I really want it that bad. I found that frequently whatever I wanted so badly to buy that I "needed" didn't seem so urgent later on.

When buying stuff, I tried to remind myself that I would then have to move it. In the past 3 1/2 years I have moved around 10 times. I've gotten really sick of moving stuff, and even regret buying a couch and bed (I had a perfectly functional air mattress.) I also have seen how much of the stuff I have bought on sale or on impulse was rarely used and got sent to Goodwill, and how little I missed the stuff that spent six months in storage.

I have also had problems with not having enough room for the things I own, especially after moving in with a roommate. I may drool over things, and sometimes I even have money for them. But I don't have the space.

I have also found that fighting weight gain has helped in saving food expenditures, not just from eating less, but that homemade vegetarian chili, or grilled chicken bought on sale/in bulk, is a lot less expensive than eating out and junk food. At times in my life where I've been forced to eat out a lot, like business trips and while I've been moving, I've gained weight because eating healthy and having small portions can be difficult.

One thing that kept me away from more impulse buys, is making a list. If I see something I really have to have, I put it on the list and resolve to come back later. Frequently later I decide I don't really need it, or I say I'm waiting for it to go on sale. (and then when I think it should be on sale I can't find it.) If I make up a list, I sort of have to justify to myself why "that designer pink sweater" is on it.

The phrase that has really helped is, "If I've gone without it this long, I can go without it a while longer." I still don't have a TV. That's become almost a matter of pride. My roommate has a TV, but I rarely watch it, and when I do I'm usually just surfing channels/wasting time. I don't think I will get one when I move out either.

As far as savings goes, the rule I've heard often is "Pay Yourself First" If you can do automatic investing/saving that helps.

Budgeting is important, but I found that the budgets I came up with from when I made an Excel spreadsheet before graduation bore very little relation to what I spent later. Tracking spending is what is really important. I find Quicken indispensible. The first time I got a big bonus at work, I was shocked to find I'd spent more on entertainment than on rent that month. Knowing where the money is going is a good step to trying to change it. It makes you think twice before another impulse purchase in one of those categories.

One other thing I am trying to do... Whenever I eat out, I almost always drink water instead of paying over a dollar for empty calories on soft drinks. I need to do that more at home. I'd spend less on groceries and not have to run the dishwasher as much if I used the same glass for water instead of several for milk, soft drinks, etc over the course of a day. Plus it would help cut down on my caffeine consumption.

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