Starting Adult Life: Saving Dough When You’re Broke

Perhaps you’re a student living far away from home for the first time in your life or you’ve recently graduated and you’re about to enter the “real world” in a brand new career. Either way, independence can often feel like a double-edged sword. There’s no denying that it’s freeing to be in control of your own life, as you can go where you want, buy what you want and simply live however you want. However, adulthood brings all the stresses and worries which used to be your parents’ concern but are now your concern. It can be all be rather overwhelming when you’re young and everything’s happening all at once.

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The main worry on any young adult’s brain when they become financially and legally independent concerns how on earth one is supposed to save money or simply afford anything, for that matter, when money is in such short supply at a young age. Even if you’ve started your first job, you’re likely in an entry level role on the bottom rung and you want to be as careful with your finances as possible until you’ve gained a little more experience and worked your way up to a more stable role. Whilst you’re at this tough starting point of adult life, here are some great tips and tricks for saving money when you’re feeling practically broke.

Find a roommate.
Maybe your new career is dragging you away from your hometown and into the city. If it’s not a long or expensive journey, then commuting from home until you’re a few years down the line might be a smart financial option, as long as you pay your parents some amount of rent. However, for the majority of people, moving out of home is a necessity both in terms of cost and the time it takes to travel to work.

This is likely the moment when you realise that, even if you rent a place, it’ll take a huge chunk out of your available monthly salary, leaving scarcely enough for the weekly food shops. At this moment, you need to prioritise your need to eat and find yourself a roommate. Splitting your rent costs in two is the only way you’re going to survive financially in these early days of your career, and living with another person isn’t all that bad if you choose the right one. Perhaps opt for a fellow working professional than a messy student who might not keep the place in one piece.

Learn how to budget.
Once you’re settled into a routine and you know how much money is coming in each month, it’s time to plan your expenditures. You know that you’re looking at a fixed amount of monthly disposable income unless you’re working on a freelance basis (but the necessity of budgeting still applies). If there’s only ever so much coming in on a regular basis, then you just can’t exceed your salary. It’s as simple as that. It might sound like common sense, but so many people end up in rough financial situations because they fail to live within their means.

Avoiding debt is simple. Budget, and stick to the budget. Allow yourself a fixed amount of luxuries, and if you don’t have enough to pay for that fancy new watch or laptop, then keep saving for another month or so and buy it then. As a rule of thumb, it’s always a good idea to let the desire for a certain purchase stew in your mind for a little while anyway to see if you still want that same luxury when time has passed.

Of course, there will be times when a necessary purchase has to be made or a financial emergency might arise which leaves you in the lurch. If you do need to borrow money, then don’t panic. You’ve not ruined your life. Everybody incurs some form of debt at some point in life, but the key is to simply prioritise this loan over the coming months and put all disposable income (after necessities such as rent, food and utility bills) towards paying off that debt before you buy any more luxuries and certainly before you borrow any more money. You’ll find that you handle debt smartly and quickly if you always work towards paying it off straight away. It can be very manageable if you have your financial head screwed on.

Your first car.
Perhaps your annual salary is generous enough that you might be able to afford your first car on top of rent. One of the joys of being an adult is that, whilst you might have passed your test years ago, you now have the finances to be the owner of your personal mode of transportation. This is the ultimate sign of independence and freedom, but, much like any other huge purchase, you’re aware of the financial drain involved with buying a car. Even if you find a deal with a cheap upfront cost, there are other factors to take into consideration. You might want to compare cheap car insurance quotes, as you’ll probably have already coughed up quite a hefty chunk of your valuable funds on the car itself. It’s also important when you’re choosing the perfect car for you, that you consider all other costs involved with the model; how economical it is, fuel-wise, for example.

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Your emergency fund.
This is another big one. Life is full of unexpected twists and turns, which means it isn’t always fair. Sudden emergencies, accidents or legal issues could put a huge dent in your bank account if you’re unprepared for them. Of course, nobody can prepare for what they don’t see coming, but you can always preemptively prepare for the possibility of a costly problem. That’s why it’s important to create an emergency fund. Whilst you likely want to put all your disposable income towards living life to its fullest, you’ve got to think about how much your future self will thank you if any problems ever arise.

Think about how thankful you’ll be in the future when you most likely run into some sort of issue which becomes minor and easy to solve because you luckily prepared for it by setting aside a small chunk of your monthly income into the emergency stash. You don’t have to put everything in there, and there’ll still be enough to treat yourself to nights out and having fun with the friends. Still, even the smallest amount of money on a monthly basis can build up to quite a sizeable sum after a few years of adding to the emergency fund. Just don’t dip into it for anything other than emergencies.

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Follow your dreams.
That’s such an overused piece of advice, but it rings true for all people in all walks of life. If you want to work towards a comfy financial future where all your present-day money-based worries are a thing of the past, then you need to be heading down a career path which inspires and motivates you. Climbing the career ladder from an entry-level role to a higher position is about having that spark for a certain industry area or that charisma within a certain type of job role, and employers see that instantly.

You’ll stand a much better chance of furthering yourself in your career and earning a more sizeable salary if you focus on where your skills lie and running with those talents as far as you can take them. Following your dreams doesn’t have to mean you’re going to be the next Brad Pitt, but it can mean that you turn your passion for computers, writing or drawing into something applicable to the real world. Don’t just head down the career path which seems “safe”. You’re young, and there’s always time to change your mind; challenge yourself, and you’ll be rewarded.