Something a lot of recent graduates may not realize is there is more to budgeting than stretching your income over your expenses. Having an emergency fund is essential.<\/p>\n
Cars break, teeth get cavities, and if you\u2019re like my sister, broken shoulders keep you from supply teaching.<\/p>\n
When my 24-year-old sister, Melissa Bruno, broke her shoulder in a snowboarding accident in December, she was forced to stay home on the couch and lose out on weeks of income. Luckily, Melissa had a rainy day fund.<\/p>\n
\u201cI have learned to always have money put aside in a second account in case of emergency situations,\u201d says Bruno. \u201cThings happen when you least expect them to.\u201d<\/p>\n
If you lose your job or have to miss work for medical reasons, costs can quickly become overwhelming.<\/p>\n
\u201cWhen I broke my shoulder, the ambulance bill as well as physiotherapy really added up. I was grateful to have that emergency money put aside,\u201d says Bruno.<\/p>\n
Many people in their twenties can\u2019t afford to set up an emergency fund for themselves and so when unexpected cost arise, credit card debt can quickly accumulate.<\/p>\n
According to Peggy Cameron, a financial specialist at Cameron Leadership Development, recent graduates often make the mistake of taking on expenses they cannot afford and leave themselves vulnerable to debt by not being prepared for the unexpected.<\/p>\n
\u201cThey let their credit cards get out of control, they forget about the fact that they will have to pay back student loans,\u201d said Cameron.<\/p>\n
Cameron also says new graduates also often buy cars with monthly payments that are too high, with terms that are too long. She says even though it might not be on the radar for young people, it\u2019s actually more important to be saving money for retirement and emergencies\u2014something that, according to Cameron, is simple to set up.<\/p>\n
\u201cHaving a separate bank account that is not tied to your debit card is the easiest way. Put an amount into a budget and save that amount every pay or every month,\u201d she said.<\/p>\n
With expenses such as housing, transportation, groceries and phone bills, having enough left over for an emergency fund and a social life can seem like a stretch, but all you need is a reasonable budget and some easy ways to trim expenses.<\/p>\n
Cameron also notes living on your own is one expectation that recent graduates should change.<\/p>\n
\u201cThey should realize that a roommate will be necessary for a few years until they are on their feet and have learned to budget, save and pay off bills on time,\u201d she said.<\/p>\n
While it is important to enjoy your twenties, managing your expenses and entertainment budget are essential. Try to have enough left over to save for an emergency fund, and expect the unexpected.<\/p>\n","protected":false},"excerpt":{"rendered":"
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