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Budgeting Advice for Young Professionals

October 20, 2014

Post-grad life welcomes the beginning of a professional career and brings a new array of challenges and opportunities. As you adapt to a more steady pay schedule and take on new financial responsibilities, it is pivotal that a budget takes priority. Learning how to budget for your new lifestyle takes time, but will help you significantly in the long run as you strive to keep your finances in line.

  1. Evaluate your financial goals.
    Meeting financial goals is a major component in getting to where you want to be in life. Whether you want to move from your parent’s home to your first apartment or need to buy a new car, your savings and current financial state are always key factors. The first step of creating your budget should be stepping back and taking a good look at where you are now compared to where you want to be. Writing down the numbers or using a spreadsheet can help make plans more concrete. Being able to watch the gap between how much you have and how much you need get narrower will help keep you motivated and on track as well.
  2. Be aware of your spending patterns.
    Assess your spending habits, both good and bad. It is worth the effort to save receipts and document how much you are spending so that you know the ballpark range that should be set aside for groceries, bills, healthcare, etc. This can also help you determine where unnecessary spending could be cut back. Opt to use cash instead of swiping your debit card to become more aware of how much you are spending. It’s easier to spend more when you don’t see physical evidence that your account balance is declining. It’s also a lot harder to convince yourself that you need something when you only have a $20 bill in your wallet. The necessity of prioritizing wants vs. needs is something you have likely heard before, but it truly is important to learn how to make purchase decisions that are most beneficial, now and later.
  3. Invest in your long-term wellbeing.
    Dedicating a portion of your money to be put into savings each month is great, but don’t be afraid to take investing a step further although you are young and only at the start of your career. Even if the percentage of money that you are contributing to a 401K or investment account is small, preparing for retirement from early on in your career will save you a lot of aggravation down the road. Those who wait will likely feel the need to scramble when the reality of retirement sinks in. Starting young will help you to avoid this stress. Saving a little over a long period of time is a great way to ease the overall burden since years of compounding interest make a big impact.
  4. Use your resources.
    Now that you have your diploma, you may cringe at the thought of having to open another textbook, but books and e-books are a great resources when wanting to jumpstart financial planning. Local banks are also a great resource where individuals are willing and ready to speak with you about investing, saving, or budgeting in general. Don’t be afraid to ask those around you for their advice. They once stood where you stand, and can likely share with you valuable information to steer you in the direction of your financial goals.
  5. Budget for fun.
    Remember, although saving and investing is important, it is equally important that you learn how to budget for fun. While you are young it is easier to travel and try new things without the obligations that come later in life. A balance needs to exist between budgeting for now and later.

Budgeting is a practice that only gets more complicated as additional factors become part of the equation. Creating a sound budget and developing strong awareness of how your spending affects long-term financial goals will create a great foundation for financial planning. The time you spend now being faithful to your budget will not only be rewarding down the road, but it will also develop good habits that will be valuable for the rest of your life.

Jim Oosterman is the Vice President of Melrose Bank. He can be reached by telephone at 781-665-2500, online at or on Facebook at

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