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All Things Money: Budgeting, Saving, Taxes, Debt, and Loans

"It sounds simple, but it’s super helpful to track your expenses for the first few months. You can sign up for an app like Mint or you can create a spreadsheet.... It’s helpful to actually see where your money is going and adjust as needed."

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1. Have enough money for basic needs and a few things that make me happy.
2. Add money from every paycheck toward six month–one year emergency fund.
3. Contribute to 401(k) and Roth IRA.
4. Invest/save for future (education, car, house, etc.) ’20

If your job offers a 401(k) match, be sure to contribute the maximum amount that your company will match. Be sure to live within your means. ’17

If you have the opportunity, meet with a financial planner to discuss goals and the best way to pay off loans and save. The advice of a professional is invaluable and makes paying off loans and saving seem much less overwhelming. It also helped me to be more efficient with my money and forced me to have clarity as to what was most important to me. ’15

Put everything on one card. Lots of credit cards have a budgeting tool built into the app—if all your purchases are on that card, it’s easy to keep track of your budget. But pay it off IN FULL every month!!! ’16

Start your 401(k) with your first paycheck (if possible) and make sure to get the whole of a company match! Budget using a tool like Mint and figure out how much you realistically spend each month so you can start building up a savings account. ’17

Automate your savings to pay yourself first. I find it so helpful to have percentages of my paychecks automatically deposited into various savings/retirement/investing accounts. It makes savings a habit rather than something I have to convince myself to do each month, and I know that what does go into my checking account is available to be used. ’16

There's a great PBS series on financial literacy on YouTube called Two Cents! It breaks up financial advice into digestible videos of about eight minutes that are not too dry to watch. Two Cents teaches you everything you could realistically need to know as a recent university graduate, including budgeting, retirement and investing. ’19

Graduate students on stipends are now able to contribute to an IRA. Set one up and contribute however much you can each month! ’18

I’ve lived at home for the majority of my time after college (the last three years). It has allowed me to pay off a lot of debt AND save a ton of money, which will keep my opportunities wide open in the future. It is quite common to live with your parents in your 20s in other cultures, and it’s a shame that it’s not more normalized here. If you are lucky enough to have that option, I highly recommend it so that you can get ahead and be able to do whatever you dream of doing a couple of years down the line. ’18

Ask for a summary of benefits when interviewing for jobs and prioritize jobs with benefits including health insurance contribution and retirement options. ’17

Live within your means. You’ll have time later on to ball out (and actually afford it!). ’17

Mint! This app helps track all of your credit card spending and more which makes it easy to keep an eye on your spending and budget accordingly. I personally do not budget but do track my spending month to month to make sure I can reserve a part of my paycheck. Also, setting up IRA accounts and long-term savings accounts earlier on will only pay off later on. ’18

Start a retirement account as soon as you can. Ask your employer if they match contributions. ’21

When I started making money that I could save, I kept enough to live off of and pay rent for a few months in my bank account, and continuously invest the rest in general funds that reflect the stock market. I won’t touch that money until I need to make a big purchase in the distant future. ’17

Max out the Roth IRA every year. Budget and spend less than what you could spend and do not change your lifestyle based upon an increase in income. ’18

Pour money into retirement plans immediately. Get every penny of 401(k) match you can. Roth is better for our age. It’s easy to start good investment/saving strategies before you have big family expenses, and the earlier you invest, the farther compound interest goes. Paying rent sucks. It will be the largest persistent bill many of you have had. If you’re in a location long term, consider saving up to mortgage a house so you’re not just burning cash. ’18

If possible, set up an auto transfer that puts some of your paycheck into a savings account each time you get paid. This way you don’t even have to think about it and don’t feel tempted to use that money for extra purchases. Also track your finances for the first three months or so. Keep track of everything you spend money on for the first few months and then take some time to sit and evaluate and see what’s working and where you might be spending more than you should. ’18

Keep an emergency fund and never touch it. If you’re spending too much, leave your credit cards at home before you go out. Just bring a certain set amount of cash. Force yourself to save. It can be tough, but it’s great for you in the long run. ’18

Spend mainly on necessities, as to pay off debt (undergrad + dental school) in a timely manner. ’21

I save but I also like to treat myself, which I think is important. When I finish a quarter or hit a big milestone in my life, I try to be mindful and proud, so I honor that by splurging a little bit. ’20

When you get your first six-figure job, DO NOT go out and lease a fancy car and do not rent the most expensive apartment you can afford. Make sure to be maxing your retirement accounts if possible and putting away three months of expenses as an emergency fund. This will reduce your stress levels tremendously. ’17

There is a lot of focus on saving money by cooking instead of eating out and canceling streaming services, but the biggest savings come from your biggest expenses, like your rent and transportation. Instead of living alone in a new build, consider having a roommate or living in a well-maintained older apartment. ’20

In addition to matching retirement/stock/etc. contributions, employers often offer benefits for transportation or fitness goals. Explore those options and don’t leave any free money on the table. ’18

I love the app Acorns. It takes small amounts of money from your bank every month and invests it. Between investing small amounts in during the summer and small contributions during school, I’ve saved up enough for a spring break trip with my Vandy friends. ’18

Keep a budget, whether it be an app or a Google spreadsheet. Even if you go over budget, track all your spending and learn your spending habits. ’19

Be honest with yourself and how much you spend. Sit down with a pen and pencil (or spreadsheet) and calculate how much you can spend versus how much you need to spend. I followed the 50/30/20 rule: spend 50% on necessities, spend 20% on extra luxuries, and save 30% of your paycheck. ’17

Stop online shopping!!!! In grad school you have less time to procrastinate, anyways; kill two birds with one stone. Save time and save money by not online shopping. ’18

Especially during COVID times, it’s so easy to fall into online shopping. I ask myself, “Do I actually need this item? Where would I wear this outfit?” I remind myself that wearing or using certain products won’t actually make me happy, and that I should only buy what I need. ’18

Open a separate savings account and determine what your regular monthly expenses are. ’20

Make sure you set aside at least 10% of your income for savings. Try to amass enough so that in the event of an emergency you could get necessities and pay rent for at least six months. Get a logbook or make a spreadsheet and keep track of your expenditures so you have an idea as to how much you spend on average. This allows you to notice where you use most of your income and you can modify your spending habits accordingly. ’19

For me, buying groceries and eating at home has been a great way to save money. I stock up on some key ingredients—onions, minced garlic, ginger, spices, potatoes—so that I can always throw them in whenever I’m cooking up whatever’s in my fridge. They all store well and add so much flavor to food. As for spices, look for the bulk spice section over the individually packaged spices. ’15

Put your savings into different buckets before you have a chance to miss it. For instance, I budget a bit towards a new car, long-term savings, travel and a rainy day fund each month. ’17

Start saving right away. Take advantage of any retirement matching from your company. ’16

Getting a good credit card is quite useful for building credit and earning rewards—but only if you pay it off on time. Debt is a slippery slope. ’17

Don’t fall victim to the credit card monster! You will start getting applications for new cards every day, but it’s important to resist temptation if you want to maintain good credit. Pick one card that suits your needs best, and stick with that. For example, I fly a lot so my primary card is associated with an airline. ’16

Ask in your job interview if the employer offers any loan repayments benefits. It’s an amazing job perk! ’16

Know your interest rates and pay off the highest interest loans first! The small differences in rates become magnified with compound interest. ’19

Pay off your newest loans first, if you can! This will increase the average age of your accounts and boost your credit. Also be extremely careful if you do decide to pay off all of your loans, as all of these accounts will disappear and your credit score may drop. Unfortunately it’s all a game, and the best we can do is manage it. Also avoid credit card debt at all costs! It’s by far the worst kind of debt and you should explore all possible other avenues before incurring it. ’20

Change to an income-based repayment plan right away if you have a lot of student loans and are not in a high-paying job! It may take longer to pay off your loans, but it will make your life so much easier in the meantime. Don’t let high loan payments control your life if you do not have the extra money. ’18

Don’t ever let yourself have credit card debt you can’t pay off at the end of the month. I basically use my credit card as a debit card (because it gives me points) but almost never get charged interest. If you keep to your monthly budget, you can live this way too. If you can’t control your spending then it’s better to just use a debit card instead. Student loans are a BEAST! Avoid them if you can. If you can’t, then get on an income-driven plan if your loans are federal. For most people it will cut your monthly payment. Keep your expenses low and pay down your debt as soon as you can. Otherwise, it’ll hinder you when you go to do other things in the future (like get a mortgage or business loan). ’16

Treat your credit card like a debit card for spending, and always pay the full balance when your statement comes out. ’20

Credit cards are a short-term, high-interest loan. Use caution. ’17

Pay off the high-rate loans first! And look into refinancing. ’17

Avoid credit card debt when at all possible. If you need a credit card for an emergency, try to make sure you have the credit score you need to apply for one with a 0% APR intro offer so you have some time to pay it off before compound interest at a 20%+ APR comes home to roost. ’21

Don’t take on new debt in anticipation of wage increases. You never know when a pandemic will cause pay cuts/raise freezes. ’18

Refinance when possible. Set a specific chunk of income every month to work on paying these down. Don't beat yourself up over it; we all have periods where we owe money and it’s OK. If it’s a credit card, see if you can take on a lower interest loan to pay it off, and then don’t spend on it until you do (or keep track of spending on it every month so you can get rewards; just make sure you’re not spending more than what you can pay every month). ’17

I keep track of all my expenses, investments, savings and loans on a personal finance app (PersonalCapital, Mint, etc.). Seeing your actual assets and debt and tracking them is the first step in becoming financially responsible. ’17

If you do not yet have a credit card, open one. You will need the credit history to eventually get approved for a mortgage. If you can afford it, pay off your credit card balance in full each month. If you have a lot of up-front moving expenses a couple of weeks before you receive your first paycheck, get a credit card with an introductory 0% APR for a few months, and pay it off before the interest kicks back in. Again, if you can afford it, buy your first car in cash, even if it has to be an older car. Not having car payments is huge. ’20

I would do an automatic payment each month for your loans. It makes it one less thing you have to think about and you know each month on the same day that you will have X amount coming out of your account. ’16

When you have debt, it’s going to stink when you start paying it off. However, always take the opportunity to look at the silver lining––paying off debt is an excellent way to start building credit history, which will ultimately play an important role in applying for loans down the road. ’16

Pay off your credit card in time to avoid paying interest. ’18

Even if your taxes are relatively simple, utilize a service like TurboTax or HRBlock. They guarantee to assist you if you are audited, which can relieve a lot of stress if it happens to you (I speak from experience). ’16

If you don’t understand taxes, read up on them. Especially if you are starting right after graduating, you will only have half a year’s salary to pay taxes on at first, so take advantage of this lower tax bracket by contributing as much post-tax to your retirement accounts, as you’ll probably be in the lowest bracket of your life. ’17

Be mindful of every deduction you can possibly take. You write off your student loan interest and any tuition funds you spent that year as a full-time student. Don’t be afraid to do your research and hire a tax person who knows better. ’17

Educate yourself! The worst thing you can do is treat taxes as a magical nemesis. Read tax guides and learn where your money is going and why. ’16

Don’t spend every dime you make or you could be left scrambling when taxes come. ’17

Many graduate student stipends do not have taxes taken out of them up front, but they can still be considered taxable income. If you are in this situation, I would advise finding an estimate for what your income taxes should look like, and be sure to save up for that. ’18

Keep track of your donations. In pre-move cleaning, I donated quite a few things but did not keep track of it, and therefore couldn’t write those donations off on my taxes. That’s a mistake I won’t make again! ’15

Pay attention to state laws when you move! Not all states are the same. ’17

Typically your company will reserve a part of your paycheck to help you pay for taxes but filing early is always helpful and reduces stress. TurboTax is great but services like that do have a fee, so do your research and decide what is best for you. ’18

There are tax incentives for all sorts of things. Make the most of them. You know better how to spend your money than the government. ’21

If your job does a W2 you’ll find taxes to be a bit backwards—you get a substantial tax return instead of owing anything out of pocket. Taxes can be largely invisible if you want them to be. ’18

Double check your W2 and pay stubs to make sure all the information is correct. ’20

Use retirement contributions and things like HSAs to reduce your tax obligation. As you start getting a higher income and accumulating more investments, the options available to you regarding taxes become more numerous. Then it becomes a mini-game that can save you a bunch of money! ’17

Consider state income tax when you’re deciding where to live. Tennessee, Texas and a few other states do not have state income tax, which reduces cost of living in those states. ’20       

Double check to make sure a parent isn’t claiming you as a dependent because that will skew your tax return. ’15

A LOT of your weekly paycheck goes toward taxes. It will probably be a little shocking at first and you never really get comfortable when you see the YTD amount that you have paid in taxes. ’15

Your salary is not your salary. Don’t start budgeting before you know how much you’ll be paying in income tax. ’16

Some states charge not only a state income tax, but a municipality income tax. This made choosing my postgrad home easy. ’17

Most graduate students on stipends do NOT have taxes taken out of their stipends, which means that you will have to pay quarterly taxes. It’s easy to do online, but make sure you know if this situation will apply to you. ’18

Allowing for greater withholdings is better than getting hit with a big tax bill each year. ’20

It takes so long to do tax returns, and things feel unnecessarily complicated. Make sure to set aside a few hours to get through it and to have all necessary paperwork. If you have someone more experienced you can reach out to, you should, to make it less of a headache. ’19

Keep receipts so that you have physical documentation of expenditures, charitable donations, etc. Also find someone who actually knows what they’re doing unless you’re super confident in your ability to do them well/on time. ’19

The general rule of thumb is to save 15% of your salary for retirement including 401(k) matches from your company. Also look into keeping a Roth IRA account on the side. If you get an end-of-year bonus or money back from taxes, put that toward your retirement savings right away. It’s bonus money that you won’t miss. Have an emergency savings account that will last you at least six months with no income, and if your employer offers long-term and short-term disability programs, buy into those. You never know if you’ll get sick or have to leave work to take care of a relative. ’16

If your company does a 401(k) match, make sure to max that out. Nobody ever wishes they had started saving for retirement later in life. Start now! ’15

Start a Roth IRA immediately. If you did math in high school, you should know that someone who invests as a 20-year-old will retire at 65 with almost twice what someone who started at 30 will retire with. Just take 10% off the top and invest it. You’ll be surprised with how little you miss it. ’14

Take advantage of your company’s 401(k) plan. Put as much as you can into it in your first few years. ’17