Managing Money Make That First Salary Work for You

by Madison Conley July 19, 2019

After graduating from college in May 2017, I applied for more than 70 jobs. Yes, you read that right.

Finally, after three months of sending out resumes and interviewing, I landed my first full-time gig in New York City (yay!). Joining forces with a few friends from school, I set the wheels in motion to move out of my parents' house in Rhode Island and into the city. Which, given my very entry-level salary, required some serious adult-level planning.

Mild panic set in: How I was going to save money on a tight budget while living in one of the most expensive cities in the world?

Turns out, with a little planning and determination I was able to not only keep up but also make progress toward short- and long-term financial goals. And I learned a lot along the way. With that, here are some of the strategies I picked up to help make the most of life on an entry-level salary.

Make a budget — and stick to it


Getting that first paycheck was such a gratifying feeling. I’d never earned so much. It was really tempting to spend it. Until reality kicked in.

There was rent to pay — taking one and a half of my two monthly paychecks — as well as utilities, an unlimited monthly transit card, food, gym membership fees, 401(k) contributions and more. Clearly, I would need to create a budget for all of these expenses and stick to it.

The good news? I found that process more liberating than limiting. Planning ahead was the key to covering the rent, bills and other expenses, while also having cash available for small splurges on coffee and night outs.

I started by listing out my known expenses. Here’s a breakdown of my monthly budget:

  • Income: $2,602 after taxes
  • Rent: $1,650
  • Utilities: $30 (including Wi-Fi)
  • Unlimited transit card: $121
  • 401(k) contribution: $100
  • Gym membership: $50
  • Entertainment: $17
  • Health and Wellness: $150
  • Groceries: $120
  • Total left for spending and saving: $364
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It’s all about balance and making the right trade-offs.
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I also looked for examples of people who had this budgeting thing down. Like Jing, a software engineer/personal finance blogger, who wrote on Millennial Money Diaries about her post-grad move to New York City.

“I was more concerned about optimizing spending if I wanted to spend, as opposed to completely cutting out all excess spending,” says Jing. “After almost a year of job searching, dead ends, panic attacks and countless questionable financial decisions...I made a budget and even allocated a healthy portion to savings!"

I took this to mean: get on track with your budget, but do that by focusing on what you have rather than reducing life to what you need to hold back on. It’s all about balance and making the right trade-offs. For example, doing some money-saving meal prep during the week might free up the cash for a fun dinner on a Friday night or tickets to a concert.

Take advantage of company benefits


Many businesses offer an array of perks to employees, in addition to medical coverage and a 401(k) plan.

I cannot stress enough how helpful these benefits have been to my bottom line. I make sure to take advantage of wellness benefits my company offers, like a discounted gym membership. Look into commuter benefits, too; these may allow you to fund your transit card with pre-tax dollars.

Though they require some face time with HR or take a while to obtain via snail mail, these and other benefits are extremely worth it and are saving me money every month.
 

Be choosy with your subscriptions


My roommates and I share cable, media and entertainment accounts (and their costs). I also split three meals a week from a meal-delivery subscription service with a roommate. It's worth it because it eliminates grocery store overspending, provides three healthy dinners during the week, and also keeps me from going out to dinner and spending money.

Of course, you do need to prioritize some subscriptions. My dad, who I always look to for advice on financial decisions, said that shelling out the money for a gym was worth it when I first moved — and the employer discount made it even more possible. I have a gym membership because I like exercise, it's a positive way to blow off steam or when I need a change of scenery from my apartment and it can potentially cut down on future healthcare costs.

Be careful with compulsive spending


I try not to get roped into last minute plans, which tend to encourage compulsive spending.

I love clothes, which means spur-of-the-moment shopping trips make it too easy to spend money on unnecessary items. I recently adopted a rule: I have to think about a purchase for a few days before pulling the trigger. If I forget about it or lose interest, it wasn’t meant to be. Turns out, this works better for me than buying something I don’t need and putting off returning it until I no longer can.

On her personal finance blog Living Well, Spending Less, bestselling author Ruth Soukup suggests several questions to ask yourself before making a purchase: "Is it a need?” “Can I afford it?” “If I say no, will I regret it in the long term?" It’s proved very useful advice for me.

The same goes for using rideshare apps. I try to only use them if I absolutely have to because I have an unlimited transit card. Taking public transportation is an easy way to save money, and usually doesn’t take much longer, especially in the city.

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Spur-of-the-moment shopping trips make it too easy to spend money on unnecessary items.
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Set up a savings plan


“When it comes to spending money,” Soukup writes, “one of the biggest litmus tests is whether we’re debt-free with an emergency fund saved up."

I strive to set aside $25 each month for that just-in-case emergency. Setting up an automatic deposit to savings is an easy way to do this. While it's not a lot, $25 a month is a manageable amount to put away just in case.

Although important life events such as getting married, buying a house or even retirement may seem to belong to the distant future, I've been told that the years can go by faster than you may expect. The earlier you begin to save, the more you can tuck away.

One area where your savings could get a real boost: Your company’s matching contribution retirement plan. My company matches up to 3%, so I opt to put in 3% as well. It’s a simple, smart way to speed the growth of a nest egg.

Make saving a social game


I have learned it's always okay to confide in friends about money stress. You might be surprised how universal those worries are. Better yet, if you’re open and honest about these issues, it makes it easier to collectively agree to spend a night in, making dinner and watching a movie to save money — together.

In fact, my friends and I often vow to spend at least one night in per weekend. We also look for free events or activities. In nicer weather we go for walks to explore new parts of the city or take a picnic to a park.

We've honed a new skill: finding places with the best and cheapest offering. For example, we'll search for the best and cheapest happy hour margarita or iced coffee. So far our records include $4 margaritas at a restaurant in Midtown East and $2.70 for iced coffee in the West Village — both great prices for New York and delicious prizes to our fun savings game, which encourages us to economize together.

For sports events and concerts, you can often score discounted tickets through ticket apps and by scrolling through social media groups for "free events near me"; there are usually ample results. You may also have access to preferred and discounted ticketing through your credit card, which my friends and I always try to take advantage of.

A friend of mine volunteers every year at a New York music festival, working in the VIP tent, where she gets to meet the performers and see the acts, all for free. It's worth reaching out to companies that host film, music and art events about these types of volunteer opportunities.

Personalize your approach


My approach to budgeting and saving may not be a perfect fit for you, but it’s all about being mindful of what's truly important to you.

While living on an entry-level budget isn’t always glamorous, overall the good times make the budgeting all worth it in the end.

Madison Conley is a New York City-based media strategist and, as a part-time foodie, she's constantly on the hunt for the best budget-friendly margarita in town. Her work has been featured on Business Insider, INSIDER and MSN.

 

The content reflects the view of the author of the article and does not necessarily reflect the views of Citi or its employees, and we do not guarantee the accuracy or completeness of the information presented in the article.