Money management for the first-time adult

I live in a constant state of “What to do?” Being an adult is hard, especially when it comes to managing money and budgeting. I want to make the best possible decision, but the best decision isn’t always clear. To be an effective money manager, it takes budgeting, decision-making, and planning.

-Develop a budget. This is major! You won’t be able to effectively manage funds without a budget. List all sources of income and all monthly expenses. This will help you know when and what bills are due so that all bills are paid on time and there is enough money in your account to pay them.

-Determine wants vs. needs. A huge decision I had to make was whether or not to get cable. I choose not to get it because it is an extra bill I don’t need. Determine what you can afford right now and what you can put off until later. Also, try bringing your lunch to work instead of eating out. Look at some other areas where you can cut back, like, getting a lesser phone plane or cutting out weekly manicures.

-Don’t put off saving. Having money set aside is important, especially when unexpected expenses come up, like, buying tires for your car. Each month my bank automatically debits a preset amount from my checking account into my savings account. This is an easy way to save and the savings account quickly grows over a period of time.

-Don’t rely on credit. Purchasing items on a credit card may seem like a good idea at first, but carrying a large credit card debt (that you can’t afford to pay back) will make a difficult situation even worse. It will also hurt your credit and cause you to be denied other forms of credit that really matter, like, taking out a mortgage someday.

-Get into a realistic payment plan for student loan debt. Student loan debt is a reality for many college graduates. According to a 2008 College Board study, two out of every three undergraduates walk across the stage with some form of student loan debt. Consolidation is a good option because it lowers your monthly payment, but it may not be the best option for everyone. The longer a loan is extended the more interest will accrue. If you cannot afford the monthly payments on your student loan debt contact your loan provider. You may be able to get into an interest only payment plan for two or four years. Deferment and forbearance are also options, but if you are working I would encourage new grads to pay something on student loan debt instead of putting it off.

-Seek the financial guidance of someone you trust. Mentors are valuable in giving advice especially in areas that are unfamiliar and often confusing like buying a car. You should choose someone that has a pattern of making good financial decisions for themselves. This can be anyone from a parent, pastor, former boss, older sibling, hair stylist/barber, or professor. I choose a close family friend that runs his own business. I can call him anytime and ask a question or advice.

Finally, if you have cut out and cut back as much as possible and money is still tight get a part-time job. Look for freelance or part-time work in a field that interests you, like, freelance photography. You’ll bring in extra income and hone your passion.

Renee McGruder is a former communications coordinator and grant writer at MMI.

  • The Consumer Federation of America (CFA) is an association of nonprofit consumer organizations that was established in 1968 to advance the consumer interest through research, advocacy, and education. Today, nearly 300 of these groups participate in the federation and govern it through their representatives on the organization's Board of Directors.

  • Since 2007, the Homeownership Preservation Foundation (HPF) has served as a trusted, neutral source of information for more than eight million homeowners. They are partnered with, and endorsed by, numerous major government agencies, including the U.S. Department of Housing and Urban Development and the Department of the Treasury.

  • The mission of the U.S. Department of Housing and Urban Development (HUD) is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD works to strengthen the housing market in order to bolster the economy and protect consumers; meet the need for quality affordable rental homes; utilize housing as a platform for improving quality of life; and build inclusive and sustainable communities free from discrimination.

  • The Council on Accreditation (COA) is an international, independent, nonprofit, human service accrediting organization. Their mission is to partner with human service organizations worldwide to improve service delivery outcomes by developing, applying, and promoting accreditation standards.

  • The National Foundation for Credit Counseling® (NFCC®), founded in 1951, is the nation’s largest and longest-serving nonprofit financial counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services.