This is a guest post for Skills You Need.
Want to contribute? Find out how.
Want to Make Your Postgrad Paycheck Go Further? Here’s How
When you finally land that full-time job after college or grad school, you’d think your financial situation would improve drastically, right? Forget the ramen or the meatloaf that’s more oatmeal than meat; now it’s time for actual menus and meals (and, wow, maybe even the occasional takeout delivery?), and grocery shopping without monitoring every penny, right?
Well, as many Gen Z’ers are finding out, after rent, bills, and student loan payments, those full-time paychecks don’t always go very far.
If you find your bank account running on fumes for most of the month despite your best efforts, it’s time to make some changes that streamline your costs and help you start saving.
The next time you find yourself spending a pay period on the tightrope, put these strategies into action.
Monitor Your Credit Score
If you do only one thing and nothing else, start monitoring your credit score. You wouldn’t believe how expensive a low credit score can be. You get higher interest rates. You spend more time and money applying for more apartments in the hope that one will accept you. You end up with credit cards and loans that have worse terms. You may even find certain jobs closed to you, especially in states that allow employers to check your credit score (even for jobs with no financial component).
Learn how to increase your credit score and judge the different levels and types of scores. You’ll find that different services have different criteria for what qualifies as fair or good credit, so it’s in your best interest to elevate your score as much as you can. The good news is that, over time, your score will go up if you can avoid some pitfalls, like maxing out your cards or making late payments.
Obviously, if you’re strapped for cash and have low credit limits, you may end up maxing out cards just to pay bills on time. But you do what you can.
Also, try to look for cards that offer rewards, especially cash back. If you have to put charges on the card, anyway, you might as well get some benefit. Even a 1% or 2% reward rate can really add up over a year, and you may be able to apply the cash back to your balance.
It’s also helpful to set up a schedule on which you call your card companies and ask for a higher credit limit. The higher the limit, the smaller the percentage your charges will take up (assuming you don’t go wild with the new credit line), thus improving your credit score.
You may also want to look at credit-builder loans if you bank with a credit union or smaller bank. These are small loans that the bank gives you and then holds in your account, and you pay the money back over time with a little interest thrown in. The loans are meant to give you a good payment history when you don’t have credit cards or have a particularly low score.
Re-evaluate Your Streaming Subscriptions
There’s a lot of good content out there and a variety of streaming services to choose from — so it’s easy to subscribe to too many. Instead of maintaining all those services and subscriptions, subscribe only to those you’re actively using. If one isn’t showing anything you’re interested in, unsubscribe until a new season of your favorite program starts.
Look at Fixer-Uppers if You Aim to Buy a Home
Maybe your paycheck is stretched thin because you’re saving for a huge purchase like a home. That’s reasonable, but you really need to consider what you can buy. If you can find a fixer-upper — one that’s priced fairly given the work it will need — you could save a lot of money. You might even be able to turn your rent and savings into a lower home mortgage price. And you can take care of urgent repairs while saving up for less pressing work. (This is another reason to work on your credit score: to secure a lower mortgage interest rate.)
It might seem like a newer home would be a better buy, especially with home warranties in place. However, those often come with hidden fees and restrictions by homeowners associations, and the construction quality might not always be what you want. You’d quite likely end up spending more on the newer home even after buying it. You might be better off finding a fixer-upper, renting a dumpster, and doing a lot of the work yourself.
Try Getting More Certifications (Really!)
While this isn’t a guarantee, getting more certifications could put you in the running for a raise or a higher-paying job. Learning new work-related skills obviously helps, and there are a lot of online courses you can take now to do this.
However, even skills that don’t seem work-related, such as training in CPR or disaster response, can show your bosses that you take initiative and could be helpful in an emergency at work — and that frames you in a more positive light. These courses are easily accessible and can be quite short. And investing just a little time that could lead to rewards in the future is a good investment.
Watch out for Phantom Energy Use
Another great way to save money: Don’t burn electricity. At home, unplug anything that’s not in use, except for maybe your DVD or Blu-Ray player (if you need to record shows). Electronic devices can still drain power even if they look like they’re off. Printers and video game consoles, for example, can be turned completely off but still draw a small amount of power if left plugged in. Over time, that adds up to higher utility bills that help drain your paycheck.
If you can, keep the microwave and other gadgets unplugged, too. Unless you’re using the clock on the microwave — not the timer, but the clock — you don’t need it plugged in when nothing is actually being cooked.
It might seem like your paycheck is here today and gone tomorrow, especially if you’re relatively new in the job market. But you can turn your finances around and make those paychecks last longer. Go step by step, and remember that time heals even financial wounds, giving you a better credit score, diminished expenses, and more savings.
About the Author
This article was written by Ann Lloyd of the Student Savings Guide.