How to Save Money on an Entry-Level Salary

Published: Oct 05, 2016

 Salary & Benefits       

Starting your first job out of college and managing your own finances is a daunting task. If you’re like me and just moved to an expensive city like New York, it can seem like you’re practically hemorrhaging money. Here are some tricks I’ve discovered to manage your finances responsibly and save money while on an entry-level salary.

Contribute to Your Company’s 401(k)

If you have the option, sign up for a 401(k), or whatever savings plan your company offers. While it may seem unnecessary to start saving for retirement when you’re in your early 20s, doing so can have a drastic effect on how much money you’ll have when you’re ready to retire. Thanks to compound interest, your savings will grow exponentially until you retire, so it’s crucial to start saving as much as you can, as early as possible. Many employers will match their employees’ contributions up to a certain percentage, which is yet another incentive for you to start saving—your employer is essentially giving you free money. Visit your HR department if you have further questions about setting up a 401(k), or if you need help determining which plan makes the most sense for you.

Create a Budget

While it may seem like a major headache, creating a monthly budget can really help you manage your finances. Having a visual representation of how much money you spend, and where you spend it, can help you allocate your funds more effectively. If you have a reference point for how much money you can afford to spend on clothes each month, you’ll be much less likely to buy that trendy jacket way out of your price range. Whether you use a simple budget template in Excel, or a sophisticated money-managing service such as Mint, having a budget will make you more mindful of your spending behavior and help you save in the long run.

Earn Extra Cash

If you have time on the weekends or weeknights, get a part-time job in order to earn extra money. Having a supplementary income stream means you won’t have to worry about spending as much of your paycheck each month. When researching opportunities, look for jobs you can tailor to your schedule, such as babysitting, tutoring, or dog walking. Having flexibility is important, since it lets you adjust your schedule if you ever have a busy week at your full-time job. If you’re wondering how to find part-time employment, check out websites such as that connect job seekers with employers.

Make Smart Substitutions

Small expenses such as your daily Starbucks fix can really add up. By cutting down on unnecessary expenditures even a little, and substituting with cheaper alternatives, you’ll be amazed at how much money you can save. Instead of ordering a drink at Starbucks, brew your own coffee at home and bring it to work in a to-go mug. Pack a lunch and snacks, instead of dropping $10 for a salad at the Panera near your office. When grocery shopping, look for discount stores such as Trader Joe’s, and be sure to sign up for their rewards programs to benefit from extra savings. For toiletries, seek out generic versions of brand-name goods. Duane Reade and CVS carry their own lines of products that are noticeably cheaper than their brand-name equivalents. While these may seem like relatively small changes, they can really make a difference for your wallet, and they can put you on track to save more in the future.