With a college diploma and a job offer in hand, the world looks bright and promising. But that regular paycheck demands budgeting for expenses and unexpected bumps in the road.
David Burgess, a 2007 graduate of Youngstown State University and a resident of Struthers, said that unexpected expenses are a common difficulty.
"Unexpected expenses like car repair are difficult to budget," he said. "Online banking helps me keep track of expenses and schedule bill payments.
"It helps me see what I am spending my money on and I can make adjustments to my monthly budget," Burgess said.
Jim Marsh, business consultant at J.P. Marsh and Co. CPAs in Hubbard, said it's best for individuals starting out in the work force to look over their expenses. Marsh said that setting up a budget makes the expense tracking process easier.
"Once people set up a budget, they can track any variances in their budget versus the actual for that month and for that period," he said. "People should put an amount for savings for unexpected expenses and major purchases in any budget.
"People think it's always a question of how much they earn," he said. "It's really how much they spend, and that budget can help someone identify problems with their spending."
Matt Lattanzi of Youngstown said that being a graduate student at Youngstown State has made it exceptionally difficult for him to budget.
"During the semesters, I can't hold a job outside of my graduate assistantship," he said. "So my expenses such as car payment, cell phone, car insurance, rent utilities, food, gas and other necessities, such as leisure, far outweigh my intake.
''I was taking out some subsidized loans to make up the difference, but now that graduate students don't qualify, I most likely will have to be incredibly strict when it comes to food and leisure expenditures, keeping myself at no more than $10 per day for all nonbill expenses."
But in addition to the day-to-day expenses, recent grads should start thinking about the future.
"The big thing that college students and graduates should think about is setting some money aside for retirement," said Dr. Raymond Shaffer, professor and director of the Lariccia School of Accounting and Finance at Youngstown State University. "They should do this as soon as they get their paycheck, because over a 40- or 50-year career, the compounding is just tremendous. It's always important to not stop setting money aside. Do it as a payroll deduction."
Dr. David Dumpe, associate professor in the department of finance at Kent State University, said that retirement should be the first priority to think about even when beginning a job. He said it is essential for graduates to start a 401(k) fund if there is a matching contribution with their employer.
"If an employee contributes 6 percent and employer contributes 3 percent, then the employee can start immediately with the 401(k)," Dumpe said. "Defined pension plans are gone these days and if the employer does not start a 401(k) fund, then they have no pension plan."
"People should start an IRA (Individual Retirement Account) as soon as possible," Shaffer said. "The longer people have the money in these accounts, the more they can earn income on these accounts."
Michael McMahon, administrative support specialist of the department of career services at Trumbull Business College in Warren, agrees that responsible practices during college years lead to a well-planned future.
McMahon is a graduate of Trumbull Business College and is also currently a student enrolled in a program for a bachelor of science degree in information technology at Western Governor's University, an online university.
"I would like to start a 401(k) fund, but I am financially unable to right now," she said. "In my situation, all the money coming in goes out in rent for my apartment in which I pay full rent. This includes electricity and water. In addition to rent, I have to pay a car payment and food expenses."
For budgeting beginners, there are many tools available to manage money.
"I use Quicken software to keep track of my money going in and out," McMahon said. "Quicken has a feature that reminds me of upcoming bills and expenses and recurring expenses."
"It's good to keep track of expenses through creating an Excel spreadsheet or even a spending diary," Dumpe said. "It takes discipline. Individuals can have a debit card to track expenses electronically."
Lattanzi relies on his online banking services to keep track of his expenses.
"I don't use any iPhone apps to track my expenses," he said. "Typically, I just refer to my online banking statements. I have accounts with two different banks. One of them is just for bills and the other is for everything else. Once I am sure I can cover the bills for the month, I start putting money on my second account for other expenses."
Devon Cretella, owner of Cretella Agency in Girard, said that websites such as Mint.com are helpful tools in helping people track their expenses.
"People can upload savings, spending information, bank account information into this system to keep track," Cretella said.
A paycheck can be an exciting reward, but it should be mindfully used.
"The real secret to financial health and success is living beneath our means," Marsh said.