For today’s Girl Boss Monday, I wanted to share a post I have been brainstorming for some time now. As a recent college graduate, the careful management of my new salary is at the forefront of my mind.
I also work in banking and my background is in Applied Math and Economics so I have been privileged to have learned about various investment strategies, tips and tricks for managing my money.
I thought it might be helpful to compile a list of finance and money tips for recent college graduates, those who have been working for a few years or even a woman who just wants to learn more or refresh her memory about careful money management. I should add, this isn’t a sponsored post and does not contain affiliate links, I am just passionate about empowering other women with quality information. I hope this blog is the best of both worlds for those of you that read my blog: art and fashion and inspiration and useful information.
Girl Boss Monday will continue to evolve and focus on different topics each Monday that I hope you will find useful. I would love to hear your feedback if you have ideas for a post or topic!
PAY OFF YOUR CREDIT CARD MONTHLY – This is an obvious mantra that each of us has probably heard over and over again, but it bears repeating, if you have a credit card you should use it for your monthly expenses and then pay the balance off in full every month to avoid paying a high interest rate on the remaining balance! Financial Institutions use what is known as the “prime rate” set by the Federal Reserve and then add several percentage points to that rate to determine their variable APR for their credit cards. If you are in your early twenties and do not have a very long credit history you most likely will be given a higher interest rate. If you absolutely must carry a balance for an emergency or unplanned expense, look into a low interest credit card – you might consider banking with a local credit union (these financial institutions are private nonprofits that usually offer exceptionally low rates to their members despite not having a long credit history.)
REWARDS – To elaborate on the previous statement, rewards credit cards can be an excellent tool to earn travel miles from airlines and cash back if you pay them off in full and are responsible with their use – there is a blog called “The Points Guy” who provides tips and strategies for maximizing your rewards credit cards and keeping track of the various rewards credit cards that one has.
CONSOLIDATE STUDENT LOAN DEBT – If you have student loan debt it might be a potential option for you to consider consolidating your student loans to achieve a lower interest rate. There is a company called “SoFi” -(it stands for Social Finance) that will consolidate your student loans for you, give you a lower rate and then you pay SoFi back in lieu of the original company that issued the loan. I’ve heard of people refinancing and consolidating their loans wit SoFi for as low as 3 percent. The general requirements to have a loan with SoFi is a solid educational background and a stable job.
MAX OUT 401K PLAN- If you have just started your job or career and your company offers a 401k Plan, MAX OUT the contribution, the money that you place into your 401k goes into the account tax-free and then can be withdrawn later in life also tax-free AND if your employer offers a match you are losing out on free money if you don’t max out your 401k. For example: if you make $100,000 a year – 6 percent of your paycheck is $6,000, if your company matches that you gain an additional $6,000 into your account that is FREE MONEY!
INVESTMENT – Invest Early. Invest Often. Invest Boldly. I recommend Ellevest.
Ellevest is a female-only, invitation only investment platform. This is a topic I will have to expand on in a later post or talk individually about but I will say that females are often not aggressive enough when it comes to investing our money and we lose because of it – even if you just put a small amount of money in a mutual fund or in a few stocks it is better than leaving it sitting in a savings account – the market will net you an excellent return over time. Please email me if you have questions I love talking about this sort of thing. #nerd. 🙂
CONSIDER A USED CAR- It seems like traditionally when someone graduates college the thought is to buy a new car, if you can afford it and it makes you truly happy go for it – however, I would merely caution that by buying that same car 1 year or 2 years older you will save a significant amount of money. Cars depreciate in value as soon as you drive off the lot and if you take out a loan to finance the car at some point in the lifecycle of that loan you may actually owe more money on the car than the car is worth. Scary to think about.
SIDE HOBBY OR PROJECT – If your job or career is not your dream job or you are just interested in earning some extra money, a side hobby or project could be a way to achieve more financial independence and might also be a fun activity. For example: I blog because I love it and it makes me happy to spend my free time doing this as a hobby but the extra income from blogging is also a really wonderful benefit sometimes! (It is also a lot of hard work but it’s definitely an added benefit!)
RETHINK THE WORK COMMUTE – Some research suggests that the main reason that some individuals do not reach their financial goals is the large amount of money that people spend driving to and from work. You should live as close to work as humanly possible for several reasons: the environment, your health, the wear on your vehicle, the cost of gas, the cost of maintenance. etc. etc. I could go on. Perhaps another reason that people overlook is the time that you lose in the car, if you spend 45 minutes a day driving to work, you lose almost 2 hours a day of time that you could be doing anything else: reading, writing, exercising, spending time with loved ones, and you’re spending money to do it! Some estimates suggest that just be cutting that distance in half you would have $125,000 in 10 years if you had invested that money instead… food for thought. If it is not possible to live close to work a carpool might be helpful, working from home, etc. even getting a new job if you can – the benefits in the long-term are tremendous.
BUY IN BULK – Costco, BJ’s and Sam’s Club offer tremendous savings for items that you must buy: toilet paper, paper towels, razors, shampoo, soap, cases of bottled water, the list goes on. If you buy in bulk you can save as much as 50 percent, it’s a little awkward to have 40 rolls of toilet paper sitting in your garage… but hey that’s money in your pocket – that’s a road trip with your boyfriend, a bottle of wine, more money to pay off your student loans, etc. etc.
CONSIGNMENT STORES- I love clothing and I love fashion but I also am amazed at the amount of waste that exists in the United States – there are so beautiful, beautiful pieces of clothing that somehow find their way into consignment stores, not only are they gorgeous pieces of clothing but they also are significantly cheaper than you would find in a store. A true “win-win” if you ask me.
ASK FOR MORE – Negotiate your salary, bet on yourself, ask for the market average or more when you’re weighing job offers and opportunities. Again, I will have to save this for another post but it is so important to be confident in your abilities and to respectfully ask to be compensated appropriately for them. Gender biases exist and should be slowly but surely broken down if we each do our part.
Are there any specific financial tips you would like to share? What are the money management tips you swear by? Any particular questions or suggestions that you have about this post?