You have just graduated college with a good job and life seems to be yours for the taking. You purchase a $45,000 sports car, secure a loan for a $250,000 home and buy yourself a stylish new ward robe. Just when life doesn’t seem like it could get any better you start receiving bill after bill in the mail and your once cushy bank account starts dwindling quickly! The fact is, many 20-somethings blow through money at an alarming rate, which leads to a lifetime of poor financial habits. Below are 10 money-saving that will help you save your hard earned money.
1. Drink Water.
$1 sodas and $3 lattes are pecuniary parasites that add calories, yellow teeth and shrink budgets. Drink water, Mother Nature’s fountain of youth. Cut out the potluck six-packs and stick to healthy H2O.
2. Don’t be vain.
Don’t indulge in tanning salons. Don’t buy aftermarket exhaust systems. Remember, shopping is not a sport. Hunt for brand-name clothes at Goodwill or Plato’s Closet or simply opt for off-brand clothes. Off-brands often are just as good as their more expensive name brand brothers.
3. Use old textbooks.
The cost of textbooks has grown at twice the rate of inflation for 20 years. Don’t play the shell game. Save 40-50 percent by renting textbooks, purchasing previous editions, using an e-book, or importing a paperback International edition. E-mail professors and ask them which textbooks are required.
When cooking from scratch, you can make a hearty three-course meal for less than $2. A fast-food dinner costs three times as much. So learn to make homemade lasagnas, crouton salads, baked lemon tilapia and sautéed breaded chicken. Never shop when hungry.
5. Download a budget tool.
Many banks, like Simple or Capital One 360, offer mobile banking and budgeting apps to their customers. Other services, like Mint.com, are accessible to anyone. These software apps make it simply for anyone to create and adhere to a budget.
6. Invest ahead.
No age is too young to begin planning for life and retirement. Case in point: John D. Rockefeller. At age 16, Rockefeller said that his two greatest ambitions were to make $100,000 and live to be 100. He lived to 97 and, upon his death, claimed a fortune worth $336 billion in modern U.S. dollars. To follow in his footsteps, invest in a Roth IRA, a money market account, or a 3-month Certificate of Deposit.
7. Don’t mortgage.
No 20-something needs a 2,000-square-foot split-level house with a half-acre lawn and $150,000 20-year fixed mortgage. Keep your roots shallow. Find a roommate, rent an apartment suite or purchase a fixer-upper.
A $100/month smartphone data plan, a $12/month Netflix HD account, $20/month for video game rentals and MP3 downloads, $18/month for cinema flicks – you could have snagged an offseason round-trip flight to Orlando!
9. Avoid Silicon Valley.
Buy a refurbished or used business-class laptop computer. If needed, pay $20 for extra RAM.
10. Pay off debt.
Two American rites of passage are an expanding waistline and expanding loans. Incoming college freshman should rely on subsidized federal Stafford loans and Perkins grants. D Thode & Associates recommends ignoring, if possible, unsubsidized Stafford loans and private loans. Pay off the largest loans first. Don’t use credit card. Paying off student loans is better for your credit score anyway.
Treat your money like a dog. Keep a leash on it, but don’t be afraid to let it go for a run.