oney matters. An obvious observation,
true, but one often overlooked by young
workers starting to draw their first pay
checks. The sight of all of those zeros
figuring at the end of your annual income
is enough to start you dreaming Mr. and
Mrs. Bigstuff dreamy when in reality most starting salaries
offer little cushion to finance your dreamstuffs. Without
intelligent financial planning —including an easy-to
maintain system of money management—you’re likely to
find your money going out the door faster than it’s
coming in.
Taking money matters into your own hands
may sound intimidating at first, but a systematic
approach to saving, budgeting and planning Is
the surest way to ensure that your bankroll never
runs out before the next Pay Day. As we saw in the
first installment of The Rmal Life Planner,start
ing salaries rarely exceed $20,000, and that
amount, after taxes,
doesn’t go as far as
you might think.
To extend your money as far as
it can go, you’ll need a workable sys
tem of personal cash management, a func
tioning budget to keep track of where your
money’s coming from, and where it’s going.
PACT: Many recent graduates live under the false
notion that, as single, working adults with only
one source of income, a budget is unnecessary.
The truth is, you will always spend less, and
have more discretionary income, when you
operate within a broad financial picture.
Budgeting is the only sure path to living ^1
within your means.
"Start off slowly," counsels Marti Robertson, director
of the New York City Budget and Credit Counseling Service,
to young workers who look on their new-found wealth as
an excuse to spend wildly. "A lot of times someone will
come out of college and they get a pretty good S15,000
or S20.000 salary, and they think that the money will go
very far," Robertson says. "It won't. I think everything will
fall into place once that person sits down and prepares a
budget. They'll see that a third of that
salary goes to taxes, in some cities
another third might go to rent, and you
don't have that much left over for lunch."
There are so many rules of thumb
when H comes to managing your money
that, were you to follow all of them, your
financial statements would be all thumbs
—a bumbling, out-of-control mess. In
this issue of The Real Ufa Planner,
we’ll take a look at the
prevailing wisdom in fi
nancial planning and
set you straight on money
strategies that matter. We’ll also point you
in the right direction with advice on where
(and how) to look for professional financial
advice, and how to determine when you need
outside help.
Chances are you'll be earning more money
after graduation than you have at any other time
in your life. It's likely also that you'll incur more
expenses during this time than at any other
period to date. Read on for some money man
agement tips to help you make sure the getting
and spending of your salary never meets to your
disadvantage.
YOUR PERSONAL
MONEY
MANAGEMENT
SYSTEM
Most students have little day-to-day
budgeting worry at school Sure,
there are loans to pay back, tuition
bills to be met, but the cost-of-living
expenses (room and board) seem to get
taken care of in the process If you’re part
of a full, campus-living plan, there is al
ready a hidden budget at work for you
your meals and housing are pre-paid, heat,
electricity and the use of a dormitory phone
are provided without a second thought on
your part; the amenities of real world living
are taken for granted
None of this will necessarily be so
once you're out on your own We don't
mean to alarm you, but some of the luxu
ries (and necessities) you've grown used to
on campus will be harder to come by after
you flip your graduation tassle to the other
side of your mortar board
‘‘It's a cold shock when most students
come out into the real world," observes
Nancy Dunnan, author of Financial Savvy
lor Singles 'They can’t bury their heads
in the sand anymore, they really do have to
meet the bills There's no way around it.”
"What we're seeing in the young
worker group is too much, too soon, too
fast, with too little planning," reports Pat
Zito, a senior financial counselor with the
Office of Consumer Credit and Counseling
in Seattle. W&shington "With the people
who are getting out of college it's been
deny, deny, deny to get through school,
and now that they're in the realm of the
steady paycheck there's an impatience to
catch up."
Since there's no way around it, let's