The opportunity to manage your own money is an incredible feeling and something you may have been anxiously waiting for most of your life! Perhaps you are a young person just heading out into the world and experiencing freedom, or you are someone who has embarked on a new career that will take you on a wonderful journey.

Both of these scenarios can be exciting, but they also come with a great deal of responsibility, especially when considering your financial future. Poor money choices made now can have lingering impacts that will affect you for many years to come. So, what do you do with your money when the paychecks start rolling in? Read on for some valuable tips. 

Create a Monthly Budget Now

Even if you do not have many bills to pay right now, it is still essential to get into the habit of budgeting your money. Set up a monthly budget spreadsheet and track your income and expenses so that you can get an idea of where your money is going. Account for every penny you spend so that you can periodically analyze your finances and make budget cuts where necessary.

If you find that you are spending hundreds of dollars each month on things like take-out, coffee, or entertainment-related expenses, try to cut back so you can put some of this money into a dedicated savings account.

 There are dozens of free budgeting apps online to help you with this goal. Just pick the one you are comfortable with and stick to it.

Start a Retirement Account

Right now, retirement may seem like it is a lifetime away, but it is never too early to start saving. Your future self with thank you! Many young professionals start out making “peanuts” compared to their potential future earnings, but you should still start saving whatever you can now. Even if you can only afford to put $20 per paycheck into your 401(k) or equivalent, this money will add up over time and will increase in value if invested smartly. As you start to make more money, you can increase the amount you contribute into your retirement savings plan.

Be selective when looking for a job and try to only apply at companies that list a retirement savings plan as one of the employee benefits. Not only can you have a percentage of your paycheck automatically deposited into your retirement account, but many companies will provide an employer match, so you end up making a little more money. The more money you contribute to your retirement account, the more money your employer will contribute as a match. 

If your current employer does not offer a 401(k) or equivalent, you can set up an independent retirement account (IRA) through an investment broker. An IRA allows you to save money toward your retirement on a tax-free basis independently.

Save for Important Life Events

Look ahead to the future and think about important life events that you are likely to need money for. Start saving for these occasions now while you have relatively few financial obligations. Do you want to explore the world before settling down in your career? Are you interested in eventually purchasing a home? Do you plan to get married and have kids? How about furthering your education? These are all examples of major life events you can start saving for right now.

Significant life changes will happen whether you are ready for them or not, and even good changes can cause a great deal of stress. However, you will be able to genuinely enjoy the new and exciting things in your life if you’ve done a little financial planning ahead of time. 

Pay Down Student Loans

The longer you wait to pay off student loan debt, the more the debt is going to cost you in the long run when you consider the amount of interest you will end up paying. Start paying off student loan debt as soon as you possibly can after graduating college. If you can afford to do so, begin paying off your student loan while you are still in school. Consider taking paid surveys online, this could help pay off some of your debt! group of fresh graduates students throwing their academic hat in the air

Also, make sure you know the difference between a subsidized and unsubsidized student loan so you can make sound financial choices and apply payments to the loans that will cost you the most money in interest. Subsidized loans do not accrue interest while you are still in school, but unsubsidized student loans do. If you are planning to make payments toward your loans while you are still in college, consider applying those payments to unsubsidized loans first.

Rules of Thumb for Credit Card Use 

This is a big one. Credit cards are great financial tools that can be used to pay for life’s emergencies, expensive merchandise, expenses you want to have the ability to track, and for purchases relating to travel. Credit cards can help you build your credit history, but they can also cause your credit score to plummet if you do not use them responsibly. Before applying for a credit card, make sure you plan out what you intend to use the card for and how you will pay the money back. 

Before charging something to your credit card, keep in mind that you should always maintain a balance of less than 50 percent of your credit limit so as not to cause your credit score to drop. You should also always try to pay back the credit borrowed within 30 days of making the purchase. If you use your credit card to make a large purchase, pay back the money as soon as possible to save yourself money on interest.

Credit is easy to get, easy to use, and hard to pay off. Once you are stuck in a cycle of living above your means by using credit cards, you’re flirting with disaster. The solution? Pay cash wherever possible. 

Be Frugal 

No matter what stage of life you are in, getting into the mindset of practicing frugality is a good financial habit. Frugal is not the same thing as cheap—many self-made millionaires out there became millionaires because they did not splurge on expensive designer goods or lavish lifestyles. Saving money and looking for good deals is always in style. In contrast, handbags, electronics, and other costly items will eventually be tucked away into a closet, never to be used again. 

Frugality can extend to other areas of your life beyond your purchasing habits too. Consider using coupons to save on groceries or make things from scratch the way your grandparents did. Better yet—grow a garden and freeze or can some veggies. Lower your utility bills by hanging clothes out to dry or turning off the lights when not in use. Create homemade gifts for special occasions or give your time instead. There are hundreds of ways to embrace a frugal lifestyle. Get creative and see what you can come up with!

Final Thoughts 

By making healthy financial decisions today, you can lock in a solid financial future that will pay you dividends down the road. You can also avoid the stress of having limited financial resources when you encounter an unexpected expense. Take some time to think about what you want to accomplish in the years to come and use these financial tips to help you to reach your goals.