As my oldest daughter, Megan, graduates this Sunday from college, I just wanted to share some of the things we have discussed (drilled into her head) with her about being responsible with her finances.

Coming out of college, for most kids, is an opportunity to start making some money.  Although in most cases it’s not that much but it’s usually more then they have seen in all their short years of working and schooling.  So, that extra money can easily turn into  early debt if they do not plan properly.

Here are some of things we have talked (lectured) to Megan about and I wanted to share them with you as I feel as though these are things that all of us can use in our own lives.

1. Live Below Your Means

Now, that whole concept seems so simple but within months it can morph into “Live Above Your Mean”.  A couple of months stretching it here or there dominos into “I have no more money left for anything”.  You need to make choices and decisions based on how much you have to spend and spend nothing more.  Which leads me to the next point.

2. Keep A Budget and Stick To It!

Keeping a budget is one of the most important tips for long term financial success.  You should know where every single dollar is going to go.  Every dollar has to be earmarked for something.  From rent, groceries, gas, and savings.  And, at the end of the month you need to sit down and evaluate what you have spent, where it went and what the next month will look like.

3. Pay Cash

At this point in your life, if it hasn’t happened already, credit card companies will be bombarding you with credit card offers.  Do not take them.  You don’t need them nor do you want them.  And don’t listen to the next person who tells you that you need to build up your credit.  Nope, don’t listen.  In most cases you will be renting an apartment and this alone is a great way to build up your credit as long as you pay on time every single month.

When you put together your budget you should be setting it up in two ways.  The first is setting up cash envelopes for yourself.  This would include categories that you will use on a daily basis.  Here are some examples:

• Groceries
• Gas
• Eating Out
• Clothing
• Haircut
• Blow Money (money for extras)

Set up envelopes so that every paycheck a set amount goes into these envelopes.  Once you have used the amount in the envelope then you are done until the next paycheck. Takes planning but totally doable.

The next way would be a virtual set of envelopes. These are envlopes that you can set up in an excel spreadsheet, Quicken or if you have a bank account like PNC’s Virtual Wallet where they have it built into your banking.  What you will be doing is keeping the money in your bank account but it gets tagged for a particular budget item.  So let’s say you get paid every 2 weeks and your rent is $500.  Every paycheck you would set aside $250 toward your rent so that when it’s time to pay your rent there is already $500 waiting in your account.  You can also head over here to check out some basic budget items you will need to consider.

4. Paying Off Your Student Loans

If you have student loans then now would be the time to focus on those.  Find out how much you will need to pay per month.  If it is more then you can comfortably afford, you can call the loan companies to discuss your individual situations.  In most cases they will make adjustments to accommodate you.  But you must pay them on time and as much as you can comfortably fit into your budget.  Consider getting a part time job to get these paid off as soon as possible.

5. No You Don’t Deserve It

Following each and every one of the tips above requires discipline.  It’s easy to follow friends to dinner and then worry about paying for it later.  You can easily get yourself into bad habits that you will regret later.  The most important thing is to have the right attitude.  Learn to say no I just don’t have that extra $10 right now.  Don’t fall into the , “I worked hard and I deserve it” trap.  Because those pair of jeans ” that you worked hard and deserve to get”, well, next month they will be on the bottom of your closet and forgotten about.  So think long and hard before you spend.

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