If you’ve just graduated college, then you might be feeling a little lost money-wise. Paying for rent, groceries, transportation, miscellaneous bills, and student loans on a low or entry-level salary can make saving up for a home seem impossible.
While young people certainly have to deal with more obstacles than they have in the past, owning a home—or even just building up your savings—is still an achievable goal! That’s not to say you won’t have to put in work, but if you start with a few of these tips, you’ll be well on your way.
Make Student Loans a Priority
The quicker you can get these paid off, the better. Not only will it boost your credit score, but not having to worry about paying a few hundred or thousand dollars a month in loans will free you up financially in some major ways.
Unfortunately, paying off student debt isn’t as easy as it sounds, and it stops plenty of people from pursuing their home-owning dreams. Check out a few tips on making your repayment easier, and create a monthly budget to make sure you’re on track.
Get Friendly with Your Budget
Maybe you aren’t good with money, or thinking about how much you owe in student loans stresses you out, but it’s best to conquer those fears and get friendly with your personal budget.
Take a look at exactly how much you’re bringing in each month, how much you’re paying in debts and bills, and how much you spend on food and fun. Try to follow the 50/30/20 rule—spend 50% on needs (rent, groceries, loans), 30% on fun (travel, food, entertainment), and 20% on savings. If you really want to kick it up a notch, up that 20% in savings to 25%.
Setting a budget is a great way to make sure you’re living within your means, and it helps you see exactly where your money is going. So if you want to increase your loan payments, you’ll know just how much you can afford to cut out of your fun budget in order to do it!
Build Saving Habits
If you’re fresh out of college, then now is the perfect time to start developing healthy money habits. For better or for worse, it only takes 30 days to build a habit, so make sure you’re making choices that the future you would approve of.
A few ways to get on the right track financially include working on your savings and retirement, paying down credit cards, selling things you don’t need, and sticking to home-cooked meals.
You might not know very much about investing, but it’s one of the smartest long-term financial decisions that you can make. To put it into a more concrete perspective, if you invest $1,000 at 22 years old—assuming a 6% rate of return—that’ll look more like $20,000 in fifty years. For not having to do any active work, that’s not too bad a profit!
The world of investing can be confusing, but there are tons of resources for beginners looking to get involved. Check out things like a 401(k) plan through your employer, or an investment app like Stash or Robinhood, both of which are great for entry-level investing!
Work on Your Credit
Your credit score plays an important part in a lot of big ticket purchases, like a house, a car, and even a new iPhone. If you miss a payment here or there or spend too much one month, it’s going to affect your ability to secure those bigger purchases.
If you can, set your credit cards to autopay and check just how much you’re spending every month. Some people say you should only use 30% of your limit, but it’s less about a specific number and more about keeping your balance low and payments steady.
Find a Home that Works for Your Budget
Here at Wilco Realtors, we won’t push you to buy a home you aren’t ready for—we just want to make sure you feel confident and satisfied with your purchase!
Whether you’re still in the process of saving up or kicking off your search, we’re here to help. Check out some of our resources for buyers, get to know more about life in Fort Worth, and give us a call when you’re ready to get started.