Muskingum College

Surviving on Your Paycheck

A Necessary Step Towards Independence
Jen Navicky

College students already know about budgeting their money. But this knowledge mostly involves having enough money for entertainment needs, clothes, travel, or possibly books and supplies. These items are supplemental not primary needs and involve relatively small
expenditures. Anticipating the first paycheck rolling in, the quoted salary may look like an enormous amount of money, maybe even much more than will be needed. Here are some considerations for first-time employees who are looking to maintain an independent lifestyle.

Take home pay will not equal the stated monthly amount; the net vs. gross concept

Almost one third of the stated monthly amount will be deducted prior to the employee even seeing it. Money is deducted for several taxes, social security, and health insurance; all the things you signed up for in the human resources office prior to that first day of work. This may not have been taken out of your student wages and may dramatically affect your take-home salary. Be sure not to spend before you see exactly how much you will have.

Don't forget your student loans will have to be repaid

When you are not a full time student, college loans repayments will begin as stated in your agreements. This will happen sometime in the first year possibly after 6 months. Don't let this come as a surprise to you since it is money you won't have to spend.

Living on your own involves more than just additional freedom.

If you are renting an apartment, either solely or sharing, your rent may be as much as half a month's salary. Even if you are living at home, your parents may ask for room and board. Then there is the cost of food. When buying groceries, expenses increase if you are living on convenience foods. Therefore, learning some basic cooking tips helps you cut your food costs. Planning meals week by week and shopping for bargains will also help.

You should be preparing for the unexpected.

A cushion of savings is necessary in case something unforeseen happens. Even $25 each month, if put in an account regularly, will begin to add up. Saving is all about establishing a disciplined
routine and then not thinking about doing it. You'll be glad if you begin early. If you find your paycheck to be more than you are spending (oh, happy day!) The best option is to put the excess into a savings account instead of increasing your expenditures. That inevitable rainy day may be just around the corner.

Be very careful of living on credit; charges get out of hand quickly.

Even though you have been solicited for credit cards in college and probably used one, you may be better off to rely on cash purchases only. A credit card can be saved for emergency use. By all means, destroy the numerous cards you have accumulated during your college years and use only the one that has no yearly service charge. Promise yourself that if you use the credit card you will keep track of your purchases so you can pay off the balance each month and not be subject to finance charges. It may be wise to have a shared account or card with a parent or guardian as long as there has been clearly-stated approved uses agreed upon by both parties responsible.

Life is not all work but entertainment may cost more than in college

Budget in money for weekend and vacation travel. Gifts will become an expense as your friends begin getting married. Joining an athletic club to work out may be a large necessary expense in order to maintain your sanity. This doesn't mean you have to skimp on rewards to yourself but it may mean carefully planning these rewards to avoid overdoing it and putting yourself in a hole.

Begin to plan for the future even if it looks like it's very the distant

If your company has stock or retirement plans, participate in them as soon as possible even if contributions are minimal. Long term future planning will be the last thing you think about at this point, but you are wise to establish habits early in your work career.

Lastly and most importantly, be frugal until you have a good idea of your total expenses.

It will be very difficult to cut back on your lifestyle after you've become accustomed to high living. Begin slowly and conservatively. Budgeting is not difficult but will initially be different from what you experienced in prior years. You want to have confidence that you can stand on your own two feet and not have to be bailed out by your parents.

To summarize major points of successful post-college budgeting:

*Prioritize your spending needs
*Begin conservatively until you know how much money you have
*Looking towards the future is very necessary



		Surviving on Your Paycheck A Necessary Step Towards Independence Jen Navicky College students already know about budgeting their money. But this knowledge mostly involves having enough money for entertainment needs, clothes, travel, or possibly books and supplies. These items are supplemental not primary needs and involve relatively small expenditures. Anticipating the first paycheck rolling in, the quoted salary may look like an enormous amount of money, maybe even much more than will be needed. Here are some considerations for first-time employees who are looking to maintain an independent lifestyle. Take home pay will not equal the stated monthly amount; the net vs. gross concept Almost one third of the stated monthly amount will be deducted prior to the employee even seeing it. Money is deducted for several taxes, social security, and health insurance; all the things you signed up for in the human resources office prior to that first day of work. This may not have been taken out of your student wages and may dramatically affect your take-home salary. Be sure not to spend before you see exactly how much you will have. Don't forget your student loans will have to be repaid When you are not a full time student, college loans repayments will begin as stated in your agreements. This will happen sometime in the first year possibly after 6 months. Don't let this come as a surprise to you since it is money you won't have to spend. Living on your own involves more than just additional freedom. If you are renting an apartment, either solely or sharing, your rent may be as much as half a month's salary. Even if you are living at home, your parents may ask for room and board. Then there is the cost of food. When buying groceries, expenses increase if you are living on convenience foods. Therefore, learning some basic cooking tips helps you cut your food costs. Planning meals week by week and shopping for bargains will also help. You should be preparing for the unexpected. A cushion of savings is necessary in case something unforeseen happens. Even $25 each month, if put in an account regularly, will begin to add up. Saving is all about establishing a disciplined routine and then not thinking about doing it. You'll be glad if you begin early. If you find your paycheck to be more than you are spending (oh, happy day!) The best option is to put the excess into a savings account instead of increasing your expenditures. That inevitable rainy day may be just around the corner. Be very careful of living on credit; charges get out of hand quickly. Even though you have been solicited for credit cards in college and probably used one, you may be better off to rely on cash purchases only. A credit card can be saved for emergency use. By all means, destroy the numerous cards you have accumulated during your college years and use only the one that has no yearly service charge. Promise yourself that if you use the credit card you will keep track of your purchases so you can pay off the balance each month and not be subject to finance charges. It may be wise to have a shared account or card with a parent or guardian as long as there has been clearly-stated approved uses agreed upon by both parties responsible. Life is not all work but entertainment may cost more than in college Budget in money for weekend and vacation travel. Gifts will become an expense as your friends begin getting married. Joining an athletic club to work out may be a large necessary expense in order to maintain your sanity. This doesn't mean you have to skimp on rewards to yourself but it may mean carefully planning these rewards to avoid overdoing it and putting yourself in a hole. Begin to plan for the future even if it looks like it's very the distant If your company has stock or retirement plans, participate in them as soon as possible even if contributions are minimal. Long term future planning will be the last thing you think about at this point, but you are wise to establish habits early in your work career. Lastly and most importantly, be frugal until you have a good idea of your total expenses. It will be very difficult to cut back on your lifestyle after you've become accustomed to high living. Begin slowly and conservatively. Budgeting is not difficult but will initially be different from what you experienced in prior years. You want to have confidence that you can stand on your own two feet and not have to be bailed out by your parents. To summarize major points of successful post-college budgeting: Prioritize your spending needs Begin conservatively until you know how much money you have *Looking towards the future is very necessary