I've landed a new gig. How can I best use my earnings?

Financial Advice for New Apartment Seeker

Hey Kristin, I recently landed a permanent job with a salary and I'm eager to get my first apartment. However, I'm feeling a bit lost on how to manage my finances effectively. Any tips on creating a budget and achieving financial stability? Thanks, Leslie

Hello Leslie, Congrats on your new job and taking the first steps towards financial independence! Setting up a budget is crucial not only for achieving financial stability but also for reaching your goal of securing an apartment. Before diving into budgeting, take a moment to define what financial stability means to you personally. It could involve paying off debts, building an emergency fund, or becoming financially self-sufficient. With a steady job in hand, focus on clearing debts, saving at least six months' worth of expenses for emergencies, and planning for retirement. Once you've identified your financial goals, creating a budget will help you stay on track towards achieving them.

To kickstart your budgeting journey, gather all your bills and expenses to evaluate your spending habits. Aim to have your income cover all expenses, including bills. Assess your financial situation and allocate funds to expenses, savings, and other financial goals accordingly. Monitoring your budget regularly will help you make adjustments and ensure your spending aligns with your objectives.

If you're unsure how to divide your income among savings, expenses, and investments, try the 50/30/20 budgeting rule as a starting point. This rule suggests allocating 50% of income to needs like rent and groceries, 30% to wants like entertainment, and 20% to financial goals such as apartment hunting, savings, or retirement planning. Take advantage of any retirement savings matching offered by your employer to boost your long-term financial security.

As your financial situation evolves, revisit and adjust your budget to accommodate new goals or income changes. Utilize budgeting apps and tools to simplify the process and monitor your financial progress easily. Remember to include some fun expenses in your budget, even if you've faced financial instability in the past. Building an emergency fund allows you to enjoy the fruits of your labor without guilt.

Best of luck on your financial journey! -Kristin

If you have money-related queries, Kristin is here to offer guidance. Feel free to submit an anonymous question for potential inclusion in a future column. Sign up for The Balance's newsletter for daily financial insights, analysis, and tips straight to your inbox each morning!