By Jamie Miller

As the days of first semester dwindle down, seniors are left in a mixed state of nostalgia and anticipation. They feel nostalgic about closing a chapter in their college town and anticipation about what is to come after graduation.

More specifically, what should saving versus spending look like for a recent college graduate trying to live their best post-college life? The anticipation is granted peace by one thing: budgeting.

Although many seniors like me do not know what our city, salary and lifestyle are going to look like after graduating, it is important to start thinking about a budget tailored to our specific needs. This plan should take all necessities into consideration: rent, utilities, retirement savings, bills – and potentially happy-hour cocktails.

To put numbers into context, a 2018 graduate with a bachelor’s in business management from the Terry College of Business at the University of Georgia had a median starting salary of $49,000 and an average bonus of $5,500. That amounts to take-home earnings of roughly $3,500 a month after taxes.

If this recent graduate lands in Atlanta, a city with a reasonable cost of living for young professionals, the median rent price of a two-bedroom apartment is $2,215 a month (this cost may not include utilities). Even though a roommate will split the cost in half, rent still consumes almost a third of these monthly earnings. If you are not careful, other luxury expenses can quickly eat away at the rest of your earnings – que the high-end exercise classes and the new Mexican restaurant down the street.

The best approach to avoid draining your earnings is to proceed with caution and create a savings plan. A good rule of thumb is to save as much as 20-25% of your total take-home earnings, if possible.  This includes depositing cash into retirement, investments, an emergency fund – for unexpected car repairs, last-minute travel – and any other savings accounts.

It is also wise to set up an account that automatically funnels a portion of your paycheck towards your 401(k) retirement plan. Twenty-two years old might seem too soon to save for retirement but it will ease the burden later in life. According to Money.com, even if you “set aside $500 a year, roughly $10 a week, over your first five years of work you will have nearly $30,000 more at retirement than if you had saved nothing then.” Also note that taxes are not taken out of the earnings you put into your 401(k). In other words, saving $200 directly into your retirement only takes away roughly $160 from your take-home earnings. Some companies will even match your 401(k) contributions up to a certain amount per month and it is wise to take full advantage of that to maximize long term savings.

Outside of putting money into accounts, there are other creative ways to save. Plan and “meal prep” food. This can limit overspending at the grocery store and save cash that would otherwise have been blown on eating out. Ditch the overpriced Starbucks pumpkin cream cold brew coffee for a cheaper, local option. Better yet, buy the ingredients to spice up a cup at home. Whether you realize it or not, making these slight lifestyle adjustments and opening a savings account will save hundreds of dollars and your future self will thank you.

Jamie Miller is a journalism student at the University of Georgia.