Graduating from college and launching a life of your own is an exciting, and slightly scary, time. It might be the first time you’ve been financially independent, earning a living and making decisions about how to spend your money.

Now that you have an increased income, the temptation may be to spend your money on things you’ve been wanting for a while. But hold on! Getting that new car might be a fun thing to do with your paycheck, but it’s not necessarily the smart thing to do.

Before committing to a $200-a-month car payment, consider putting money aside for yourself – and that means setting up a savings plan. Follow these seven tips for building a healthy savings account:

1. Create a monthly budget.

Knowing where you spend your money is an important first step to saving, and a budget will help keep you accountable for this every month. When creating a monthly budget, start with set expenses, such as rent, utility bills and loan payments. Then move on to discretionary spending, such as eating out, bar tabs, concerts, etc. This will help you see if your spending is out of balance, so you can make changes. For example, if you’re spending a lot of money eating out, you can start cooking at home to save money on food costs.

2. Pay yourself first.

Always shift a set amount of money out of each paycheck to some type of savings account, like a cash-based savings account. This will help you build a financial cushion that can cover three to six months of living expenses, in case something happens to your job. It will take a while to get there, and it won’t be fun putting away money that could otherwise go toward that next festival ticket. But getting into the habit of saving money out of every paycheck, however small the contribution, will be worth it in the long run.

3. Take advantage of special offers and deals.

You don’t need to be a crazy coupon clipper to take advantage of money-saving deals. Maybe you decide to stay on your family’s cell phone plan because the monthly payments are cheaper, or you only eat out on 50 Cent Wing Night or $2 Taco Night. Again, the savings might seem small, but they start to add up fast.

4. Create a debt repayment plan.

Make a list of your loans and debts, including how much you owe, how much your payments are and the interest rate for each debt. Then set a debt payoff timeline for yourself, prioritizing the loans with the highest interest rates first. The sooner you pay off your debts, the sooner you can start saving or investing this money instead.

5. Consider a roommate.

Now that the college years have passed, a roommate might not seem as necessary. But with the cost of living prices surging in a lot of major metro areas, sharing an apartment could mean saving hundreds of dollars each month. Not only would you cut your rent significantly, but you can also save by splitting utility bills, groceries, household items, and more.

6. Take advantage of your employer’s 401(k) plans.

Retirement might seem very far away when you’re right out of college, but it’s important to understand the benefits of your employer’s 401(k) plan, especially if they provide matching contributions. Many employers will match three to six percent of your 401(k) contribution. Remember, this is free money that will start to compound over time. At a minimum, contribute as much as your employer will match but if you can, try to exceed that amount.

7. Supplement your income.

If you’re finding that your paycheck isn’t stretching as far as you’d hoped, see if you can supplement it with a side hustle. The gig economy is booming, with plenty of options to increase your cash flow and gain a valuable new skillset. With the additional income, you can put more money into savings or investing for the future.

 Setting up a savings plan may seem like too much “adulting” right out of college but remember that, thanks to the magic of compounding interest, small steps will lead to big results. It’s never too early (or too late!) to start saving.

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