Discussion Thread

Managing Your Income After Graduation

  • 1.  Managing Your Income After Graduation

    Posted 06-06-2019 03:29 PM
    After graduation, many new engineers will find themselves in a great job with new responsibilities and with the task of managing their income. I have met so many people that do not know where their money goes that it is scary, especially right out of college and in debt (hopefully not too much). 

    I am definitely not an expert, in fact, I have a debt of my own due to living circumstances, transitions, and others. I was blessed to go through college without owing a dime, but I knew I had to take control of my money. I created a very "complicated" excel sheet to keep track of every cent that came in and out of my household. It has helped me feel in control rather than ending the month without knowing where the money goes. 

    What is your advice for younger engineers that will enter the workforce to manage their new income and make sure they are set for life?

    I would say, get a budget (I will be happy to share mine with you) and more importantly, stick to that budget. Make sure you are not splurging your new income as this may be the most money you may have had earned in your life so far (at least it was for me).

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    Luis Duque EIT,A.M.ASCE
    Structural Engineer
    Broomfield CO
    luis@...
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  • 2.  RE: Managing Your Income After Graduation

    Posted 06-07-2019 07:49 AM
    Luis,

    I would say setting a budget is the most important. It's important to really get into the details. For example, understanding how much taxes and health insurance will cost and determining what your actual take home pay is. There are apps from credit card companies and third parties that can help you set a budget and track your spending.

    Other things I would say are important are to set aside money for an emergency (usually 3 months of expenses are recommended) and understanding what debt (if you have any) is costing you and working towards paying back loans as soon as you can. There's a temptation to suddenly "upgrade" your life and splurge on new things. The more you can hold back on unnecessary spending, the better.

    I would also consider learning about saving for retirement and start doing it as soon as your company allows you to. The earlier you contribute your money, the longer it has to grow. Learning about the best investment options will make sure you're not paying higher fees than you need to. After considering all of this, I would look into what you feel comfortable spending on fun.

    There are many books, websites, blogs, and podcasts out there to help young professionals learn about money. Many of them break down topics into very simple and easy-to-understand concepts. Start with the right mindset and then work towards the specific actions you'll need to take.

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    Shainur Ahsan M.ASCE
    Civil/Structural Engineer II
    Fairfax VA
    (205) 743-8759
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  • 3.  RE: Managing Your Income After Graduation

    Posted 06-07-2019 07:50 AM
    That is great method to control monthly salary. I also faced  this problem. If we can  make excel sheet as you mentioned it's better to calculate our expenses. Then we know how to manage our salary.

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    Mohan Mohotti Aff.M.ASCE
    Anuradhapura
    94770020845
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  • 4.  RE: Managing Your Income After Graduation

    Posted 06-07-2019 10:27 AM
    I can suggest using Mint. It is an app that can be linked to your bank, credit, and loan accounts to automatically pull in your transactions and sort them into categories. You can set a budget in Mint and the app will track your spending for these categories based on your transaction types. It may be a bit easier than trying to manually track everything in Excel. You may still have to make some tweaks manually in the app.

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    Shainur Ahsan M.ASCE
    Civil/Structural Engineer II
    Fairfax VA
    (205) 743-8759
    ------------------------------



  • 5.  RE: Managing Your Income After Graduation

    Posted 06-07-2019 08:45 AM
    Great topic!
    I would recommend creating a budget, save, leave room for the fun things and invest! Investing is crucial for building generational wealth. Starting early makes a world of a difference. Make sure to diversify your portfolio.

    Diniece Mendes, EIT, A.M.ASCE




  • 6.  RE: Managing Your Income After Graduation

    Posted 06-16-2019 02:55 PM
    Hi Luis, 

    Thank you for your post. This is very relevant for me as I will be graduating soon. So far, I am having trouble following a budget. Would it be possible to share tools you use for your budget like a spreadsheet? That would be really helpful. Thank you.

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    Fariha Ahmed S.M.ASCE
    Kimley-Horn
    Fort Worth TX

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  • 7.  RE: Managing Your Income After Graduation

    Posted 06-17-2019 08:11 AM
    I did not graduate yet and I owe a very huge amount of money. Yet, I have some savings here and there.

    I would suggest you start taking some cash out of your pay check and save it somewhere in your house where you forget about it.

    Having your money right in front of your eyes is always a problem, but when you don't see it your forget about it and you start managing the rest of the money you have and how to spend it.

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    Abdul Hadi Chamali S.M.ASCE
    dll_39@...
    Washington DC

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  • 8.  RE: Managing Your Income After Graduation

    Posted 06-17-2019 11:14 AM
    Abdul, 

    I don't think stashing cash around your house is a great idea. I would recommend getting separate savings accounts with a decent interest rate. I personally use the American Express Savings account which gives me around 2% APY. I do not have a physical debit card so I am not able to spend money from there unless I transfer it to my checkings, and even then it takes up to 3 days to get to my account. 


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    Luis Duque EIT,A.M.ASCE
    Structural Engineer
    Broomfield CO
    luis@...
    ------------------------------



  • 9.  RE: Managing Your Income After Graduation

    Posted 06-17-2019 11:11 AM
    Email me at luis@... and I can send some resources

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    Luis Duque EIT,A.M.ASCE
    Structural Engineer
    Broomfield CO
    luis@...
    ------------------------------



  • 10.  RE: Managing Your Income After Graduation

    Posted 06-17-2019 09:41 PM
    Now that I'm back to grad school after some years of experience, I had to drastically cut down on my expenses, but I can share how I used to manage my net income (after tax and health insurance) as a single young professional. This of course might not work for many, but this was the breakdown of my spending: 

    - 8% of my salary went to a savings account I would totally forget about.
    - Another 3% to put aside for life emergencies/medication (it's also a good way to remember we're vulnerable, and stay grateful for good health, family and whatnot). 
    - Transportation: This clearly depends on many factors but for a stable lifestyle, I usually think of somewhere around 15%, which should include insurance, gas, parking, ridesharing, etc. 
    - Groceries and house needs: Around 15% looked reasonable to me.
    - Health/fitness: Whether it's yoga, gym, dancing, .. I always keep a 3% of my salary for physical activity.
    - Housing: I like to stick to a maximum of 40% for rent/mortgage payment. 
    - Investment: This is useful to always remember to generate wealth and not rely only on current income. You might not be tempted to invest when you're burdened with debt, but it's always a way to keep thinking ahead of time and developing one's creativity/motivation. I set it at 3%. 
    - Leisure: For expenses on fun activities, outings, etc, I did my best to keep it under 15%. 
    - A systematic 1% to charity (The way I like to see it is that our income is not all ours; we're able to prosper as individuals also because we live in a community that allows it, so let's not forget to be empathetic and remember those in hardship by donating a tiny meaningful bit). Plus, it's proven that giving helps to develop a deeper sense of happiness, and for sure what goes around comes around. So even "capitalistically" speaking, it's a good investment. 

    I was lucky to not have any loans to pay off, so this worked for me to maintain a healthful, balanced and stress-free lifestyle. It takes lots of discipline though, and it was hard at times to stick to it, but most important to me was consistency over time.

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    Talha Rifaai S.M.ASCE
    Austin TX
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  • 11.  RE: Managing Your Income After Graduation

    Posted 06-18-2019 10:12 AM
    Talha, 

    Looks to me like you are right on track! The way you are splitting your income is great. Are you keeping a budget to keep track of your expenses? Or are you just aware of how much you are spending? Is there anything you recommend doing to make sure you are on track with your expenses? I know for me something that has helped in the past for some expenses is keeping an envelope with the amount of money I budgeted. That way once the cash is gone I know I am done with spending for that category. 


    Thanks for sharing!

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    Luis Duque EIT,A.M.ASCE
    Structural Engineer
    Broomfield CO
    luis@...
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  • 12.  RE: Managing Your Income After Graduation

    Posted 06-18-2019 12:46 PM
    Luis,

    I kept track of all my expenses during 3 months of normal activity using an app, then based on that I tried to decide on a feasible plan that I tweaked as I went along for 3 other months. Once I had the plan in mind, I would just get a sense of what feels like a reasonable spending and go with it.

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    Talha Rifaai S.M.ASCE
    Austin TX
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  • 13.  RE: Managing Your Income After Graduation

    Posted 06-18-2019 12:53 PM
    Talha, 

    That is great! I personally use a google sheet that works great for me along with Mint to automatically track transactions. I think is great that you developed a system that works for you, at the end of the day that is all that matters.

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    Luis Duque EIT,A.M.ASCE
    Structural Engineer
    Broomfield CO
    luis@...
    ------------------------------