Financial Advice For The Young Professional

When you first enter the professional market it’s tempting to jump six steps ahead of where you actually are. Getting that new job is a heady experience and when you get that first paycheck it’s tempting to spend all of it on a big new apartment, a brand new luxury car or even on a shopping spree. Resist the urge!

For one thing, most landlords, auto financing companies, credit providers, etc aren’t going to take a single paycheck as evidence of your permanent financial solvency. For another, the last thing you want is to get saddled with a bunch of debt and contracts and then find out that you hate your job or, worse, that the company needs to downsize you.

The trick to surviving in the professional world is to live as cheaply as possible for as long as possible so that you can save up to keep your “assets” covered in the event of an emergency. Here’s how to do that.

1. Live in one place (with roommates) for at least a year.

Living in the same place for a year or longer helps you build up a stable rental history, which every landlord is going to want to see when you’re ready to move into your own place.

Living with roommates helps keep the monthly costs low. You might not like the idea of sharing your space now that you’ve finally moved out of the dorm but you can deal with it for another year. Living with three roommates in a two bedroom apartment will keep your portion of the rent and utilities ridiculously cheap.

Pro Tip: Your rent should never cost more than what you would earn in a week at your job.

2. Buy a Used Car Instead of a New Car

The primary benefit to buying a used car is the price. Even if you had your heart set on a luxury vehicle, you can buy one used for a fraction of what you’d pay for it new. According to www.sportdurstcdj.com, buying used means that the depreciated value of the car over time won’t be such a hard pill to swallow when you’re ready to sell.

Pro Tip: Lease a car until you can afford to buy your own outright. Leasing allows you to drive the car you want at a lower price than you’d pay for a car payment and alleviates the stress of the commitment that comes with buying a car.

3. Every Day Expenses

Set a budget for your every day expenses. Decide how much you feel comfortable spending on things like meals, personal care, going out, etc and then stick to that budget. Eating cheaply is easier than you might believe (even if you only want to eat organic). Buying generic products for your personal care (shampoo, soap, etc) saves money there. Shopping at thrift stores will keep you nicely clothed for a fraction of what you’d pay at a department or designer store.

Sticking to these restrictions isn’t always fun—especially when it feels like your friends are able to afford everything they want or aren’t being nearly as careful as you are. Remember, though: by saving now you’ll be prepared later!