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Financial success is something that takes time and consistency to obtain. As a New Grad, you may be saddled with school debt, struggling to find a job, or trying to figure out how to control your new budget. If you are still learning the ropes of this “financial thing”, that’s okay. Do not pressure yourself to get it all together overnight, simply focus on doing better this year than you did last year. In this post we’ll talk about some ways you can make small financial improvements that will take you a few steps closer to your financial goals this year.moneymoney

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1. Record EXACTLY Where Your Money Is Going: The first step to gaining control over your money is to know where it is going. Money has a way of nickel-and-diming away. Even if you know you have no expensive habits, you may be surprised to know how much you spend on small things day to day.

Create a simple spreadsheet (or grab a pen and paper) and jot down your spending for a week or two. This includes bills, lunches, coffees, and incidentals. Get a realistic view of where each dollar goes during a typical week. This awareness should cause you to take a step back and decide whether there are places you could be more efficient with your money.

2. Set Up An Investing Account: In a previous post, we discussed places you can invest with under $1,000. If you still have yet to make that first investment, now is a great time to do so. The markets are currently performing well, and technology makes it easier than ever to get into the investment game. Just go to your bank and ask about buying into a mutual fund or opening a small Certificate of Deposit. Yes, there are risks associated with investing, but you’ve got to start somewhere, and these are relatively low-risk investments.

If you want to go the online route, there are platforms like Betterment.com, eTrade, and others that allow new investors to manage their portfolios completely online. I’m in the process of opening accounts on a couple of these platforms, so stay tuned for future posts on how these actually work and how good the returns are!

3. Pay Off Your Smallest Debt ASAP. Small victories make us feel like we can tackle even larger obstacles. If you have debts, make it your goal to fully pay off one of those debts within the first 30-60 days of 2015. Even if it is a $100 retail store card. Just get yourself a small win early in the year. You’ll feel good once you see that balance go to $0, and you can take the payments you were making on that debt and add that to the next smallest debt in order to pay that one off early as well.

If you have larger debts that will take longer to pay off, give yourself monthly extra payment goals. Perhaps you will aim to pay an extra $200/month toward your student loan. Each time you do that, you have just saved on interest over the life of the loan and you have shortened the time it will take to payoff the debt.

4. Evaluate Your Insurance Coverage.  One of the themes of New Grads Now What is, “EVERYTHING’S NEGOTIABLE”. There’s even a blog post about 10 things you can and SHOULD be negotiating as a New Grad. Insurance is one of those things that far too many people are overpaying on. The new year is a great time to call up your insurance agent and have a discussion about your current coverage. Below are a couple questions to ask your insurance company (these apply mostly to car insurance because most New Grads operate a vehicle, but if you own a home, these questions could apply as well):

Am I overinsured? Or underinsured? (Understand what your insurance actually covers and decide whether you are paying for the type of coverage that is right for you).

Am I eligible for any discounts based on my occupation?

Are their any discounts available for features like anti-theft systems or antilock breaks?

How would my rate change if I bundled my car AND home insurance with your company (if you own a home)?

You should also “shop your insurance” by calling multiple other insurance companies and getting quotes from them. If they are competitive, present these quotes to your current insurance company and ask them to beat those prices.

5. Set Long Term Financial Goals. We all have our own ideas of where we want to be financially in the future. New Grads typically have one or more of the following goals:

– Travel and see the world

-Eliminate student loan debt

-Save a down payment for a home

-Start investing for retirement

-Retire early

-Obtain an advanced degree

-Start a business

-Obtain a high-paying position at work

Whatever your financial goals are, take a moment to write them down and plot a general plan to achieve them. How much money will you need to take that trip? What type of skills do you need to gain to position yourself for that promotion? How much money can you set aside to pay down student debt?

You’re not going to have all the answers right now. However, setting concrete goals will give you a “why” for the sacrifices you’ll be making in 2015. It may be difficult to change your lifestyle just because. But if you know you’re working toward a larger goal, you may be willing to make the necessary changes to achieve that goal.

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Conclusion

2015 can be the best financial year you’ve ever had so far. If you pay off one more dollar of debt than you did in 2014, you’re on the right track. If you begin to budget and control your cash better than you did last year, you’re on the right track. If you make this year the year you begin investing, you’re on the right track.

As mentioned earlier, the road to financial success is long. Take action on the tips that you read in this article. Get those small wins early in the year, and you’ll be well on your way to a prosperous 2015 and beyond!

 

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newgrad23

Jonathan (a.k.a. Newgrad23) is a recent college graduate with a passion for helping Millennials take charge of their career and finances from Day 1 after college. He enjoys blogging and listening to personal finance podcasts. When he's not doing that, you can catch him at local sporting events, music festivals, and near the best food trucks the city has to offer.