Learning how to effectively manage your money after college, even by saving a little at a time, can really add up and benefit your future. Here are some tips on how to get started setting yourself up for financial success.

Make saving for an emergency a priority.

Never underestimate the importance of an emergency fund. Put aside a little money every month to prepare for life’s unexpected events, like your car breaking down, an unplanned family emergency, or a job loss. You can start by saving a small amount and consider putting it into a high-yield savings account, which can help you earn as you save. A good rule of thumb is to strive to have 3-6 months’ worth of expenses saved. Expenses include things like rent, gas, utilities, food, debt payments, and any other necessities or regular payments you have. The amount you should save depends on where you are, in your finances and in life. Make sure to build out a budget and factor savings as a line item. This step ensures that you’re saving, even if it’s $25 or $50 at a time.

Manage Debt Responsibly.

As a post-grad, you may have acquired some bills and debts from the cost of college, purchasing a car, or even just overspending on your credit card. If you are in debt, you'll want to start paying this off to avoid it from building up. Having debt can make it harder to acquire a loan, open an account, and can even hurt your credit if not managed responsibly. Here are some two methods to conquer your debt.

Debt Avalanche Method: The debt avalanche method says you should pay off debt with the highest interest rate first. Once you’re done with that payment, focus on the next highest interest rate loan. This method helps you avoid paying more interest and increasing your debt.

Debt Snowfall Method: The snowball method says you should start with the smallest balance first. Once you’re done with that loan, you move on to the next smallest loan. This method helps you conquer small amounts at a time so you can save while you work towards paying off your debt.

Remember that as you’re paying off your debt, try to avoid taking on more. You can look at different ways to cut down your expenses, like packing your lunch for work instead of eating out and choosing inexpensive entertainment options, like hosting a game night or a family gathering at home instead of going out. The more you start to make healthy financial decisions, the easier it will be to avoid debt.

Break down your monthly budget

To better understand your spending habits, try keeping track of your expenses for a month or two. Analyze your spending to determine if it works with the 50/30/20 method. This method breaks down your expenses by needs, wants, and savings. This will set the groundwork for a better understanding of how far off from the budget you will be starting off. Aim to spend 50% of your budget on essentials such as rent or mortgage payments, student loan debt, food, utilities, and car payments. Next is to try to put 20% of your paycheck toward savings and investments such as an emergency fund. Finally, the last 30% of your budget can go toward spending on nonessential expenses like travel, eating out, and shopping. The basis of the 50/30/20 budget is rooted in understanding what your income is. By understanding what you earn and what hits your bank account each pay period, you'll be better positioned to establish the correct budget amounts for the three categories.

Pay Yourself First with Direct Deposit.

As a young adult learning to budget, Direct deposit can help make it easy to allocate your finances. Direct Deposit is the electronic transfer of your paycheck directly into your account. When you use Direct Deposit, you can allocate your money to multiple accounts, like your checking and your savings. This way, you don’t have to do it manually and you become accustomed to a certain amount being put away for saving purposes.

With Jovia’s Early Direct Deposit3, if your employer sends your payroll to Jovia early, you might find your paycheck in your checking account up to two days earlier than you expected it. Learn more about early Direct Deposit here.

Keep track of your bills and make timely payments.

Receiving bills can be stressful as a post-graduate. When you’re building a budget, look at your bills from the previous month to see what you typically spend paying them, and incorporate those expenses into your budget. This way, you’ll know how much money needs to go towards your bills each month, and you won’t be as tempted to spend on take-out dinners or online shopping. Paying bills on time can positively impact your credit score, and this will later benefit you in the future when you plan to get your dream car or a new home.

Establishing healthy financial habits as a young adult can provide lifelong benefits for you and your wallet. The earlier you start budgeting and saving, the easier it will be to develop healthy financial habits.

3 Early Direct Deposit of regular periodic payments (such as salary, pension, or government benefits) may be available to you up to 2 days earlier than the payer’s scheduled payment date. This feature depends on timing of the payer’s submission of ACH deposits so it may not always arrive early as it depends on the timing of your payer’s payment instructions. Certain non-payroll and tax payments are not eligible for early direct deposit.