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7 Smart Ways to Stretch Your Post-Grad Paychecks

Ann Lloyd  |  July 25, 2019

Congrats! You've got your first paycheck in hand. Even if it's not as much as you were hoping, there are some great ways to stretch it as far as it can go.

It’s so exciting to land that first full-time job after graduation. The last of those nights burning the midnight oil while studying should mark the end of Ramen noodles as your main source of sustenance. But for many recent grads, it takes time to get financial affairs in order and establish a regular routine of responsible spending.

While you might have managed some of your own finances when you were in school, things are (often a lot) different when you leave the safety net provided by your parents or your college. You’re earning your own paycheck now and have to pay your own rent, utilities, and transportation — not to mention your recently acquired student loan payments.

If you find your first checks aren’t going as far as you hoped they would, you’ll want to be more strategic about your spending. Here are some ways to stretch those post-grad paychecks.

1. Live in a cheaper city.

Once you graduate college, your life is an open journey: You’re free to take any path you want. If the city you live in is too expensive, why not pick up and move to a cheaper one? For instance, Tampa has a fast-growing STEM job market and a low unemployment rate (2.9%) and is among one of the most affordable cities in the country. The lower costs of living can help your pay cover a lot more than in a more expensive place. Take a look at the map and see which cities strike your fancy, or poll your friends on social media for places they love (and can afford.) 

2. Understand your tax situation.

Up until now, you probably didn’t do much when it came to your taxes, but as a grad, you’ll be taking on this responsibility yourself. As you fill out the HR paperwork for your job, take a careful look at your W-4 form and get some help calculating the tax withholdings to be taken from your pay. Ideally, you want to break even every spring when you file your taxes, but if you’re not great at saving, try having some extra money deducted from each paycheck. This way you’ll end up with a bigger tax refund from Uncle Sam. Yes, technically you’re giving Uncle Sam a short-term, interest-free loan. But many people find that a no-fail way to save a nice chunk of change they might not have otherwise.  Then you can put that money towards practical purposes, like creating an emergency fund or a retirement account.

3. Buy secondhand furniture.

Furniture is expensive, and there’s no need to put yourself into debt by buying everything brand new. Instead, hit the thrift stores (Goodwill, Salvation Army, and Habitat for Humanity are some great options), scour Craigslist listings, check out Freecycle for freebies, or join some local Facebook groups to see if any of your neighbors are selling furniture on the cheap. 

4. Change your eating habits.

In college, it was so easy to just stop by the dining hall or another campus eatery to grab a bite or a coffee. Now that you’re out of school, there is no more dining plan. You’re on your own. Now it’s time to learn how to brew your own coffee, pack your own lunch to take to work, and cook your own dinners, so you aren’t spending money on takeout every night. 

Buying prepared food and drinks are one of the biggest budget busters; money spent in this category adds up super quickly. Just how quickly? By some estimates, you’ll spend about 5 times more on eating out than if you were to make the same meal at home. Do yourself a favor: Invest in a good cookbook (check out thrift or used bookstores for some options!) and a coffee maker – and set yourself up for some major cash savings.

5. Take ‘workcations.’

If you’ve always wanted to travel, you may be able to work it out easily through your employer. Today, more employers offer  flexible remote working options, which means you might be able to take a couple of weeks and work remotely in, say, Amsterdam. In some cases, you may be able travel for work, perhaps promoting your company’s brand at trade shows — with all expenses employer-paid, at least for the business aspects of your trip. You never know until you ask, so talk to your employer up front about your desires to hit the road. 

Another way to add money to your pocket: If you’re looking to leave town for an extended period of time, consider renting out your home or apartment as a vacation rental. Just be sure your homeowner’s association or landlord allows this before you list your place. 

6. Cut the cord.

Thanks to the power of wireless connectivity, you don’t have to pay costly cable and telephone bills anymore. Sign up for cell and streaming services such as Netflix, Hulu and Amazon Prime to get the entertainment you need. This way, you only pay for what you’re actually using, rather than spending money on a slough of unwatchable cable channels or a landline that you never touch.

7. Watch your spending on utilities. 

Some landlords  include utilities such as heat, A/C, electric, and water in your monthly rent payment, while others keep these services separate. If you’re responsible for some or all of your utilities, you’ll want to understand how to avoid wasting energy.  For example: Don’t leave your heat or A/C on at home if you’re going to be gone all day. Turn it off when you leave, and turn it back on when you get home. Also, only run your washer, dryer, or dishwasher when you have a full load. Running half-empty appliances wastes a lot of energy. On that note, shut down computers and other devices you aren’t using — if you look around your place with a critical eye, you’ll see many ways you can cut back on energy waste. 

Running out of money month after month is not a fun way to live. It also sets you up for financial instability, where just one unexpected big expense (serious illness, car accident, home repair) could plunge you into debt. Why not break the cycle and set yourself up for financial success instead? Use our tips to help get you started. Once you get going, you’ll become a pro at finding ways you can stretch your post-grad paycheck.  

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Ann Lloyd is the founder of The Student Savings Guide, which offers advice for students, recent grads, and anyone interested in budget-friendly resources and money-saving tips. Her favorite things to write about include applying for scholarships, rent and moving expenses, food budgeting, and shopping.
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