Money doesn’t grow on trees: Learn how to budget on a starting salary

Learning to manage finances is critical for a student to learn when entering the work force. Baylor's Career Center offers advice for students learning to budget. Christina Cannady | Photographer

By Jenna Frisby | Social Media Editor

One of the harsh realities students face as they enter the work force is learning how to spend their money. Money can be a scary thing to think about, especially when you are navigating how to support yourself financially for the first time.

Budgeting is all dependent on your starting salary, which varies for everyone. Caelie Terrazas, a career success professional with the Baylor Career Center, emphasized the importance of negotiation in order to make the most of your starting salary offer.

“Negotiation is definitely one of the scarier career terms,” Terrazas said. “Students sometimes say that they will lose the offer if they negotiate — this simply isn’t true. Everyone can negotiate, and it’s a skill the Career Center can help you with so you can get the best salary you can right off the bat.”

Once you have your starting salary, you can begin allocating expenses based on your needs. Terrazas said budgeting requires a tailored approach and is uniquely based on the individual’s situation.

“It’s important for students to prioritize those nonnegotiable payments. Housing, student loans, things like that… also determining what is most important for them to spend their money on. Is paying something off a really big goal? Is saving a big goal for them? Really customizing their list of goals and priorities is very helpful,” Terrazas said.

Budgeting is a critical skill to master in order to make the most of your income. Recent Baylor graduates have experienced budgeting firsthand, as they reflect on their progress nearly a year post-grad.

Class of 2020 alumna Katelyn Lunini, who is now in grad school, said the temptation to spend instead of save when you get that first paycheck can be compelling.

“The excitement of graduating and having a ‘big kid job’ makes you want to do more expensive things,” Lunini said. “You feel like you have a lot more money so you will go to more birthdays and spend on this and that. Yes, you have more money, but saving is so important. It gets overwhelming to not want to spend money because it’s more money than what you’ve usually had.”

While budgeting is a learning curve, it takes time to figure out what works for you. Lunini said the biggest area you can save in is housing.

“Find a place to share with people. Living alone in any big city is really expensive, and it can get really lonely while working remotely,” Lunini said. “Try to find a place that’s affordable even if it isn’t the fanciest apartment.”

Lunini said she recommends joining Facebook pages during undergrad years to find potential roommates.

“That’s what I did when I lived in Dallas, and it dropped my rent from what would’ve been a $1,400 apartment by myself to $600 a month,” Lunini said.

Class of 2020 alumna Leelee Nelson now works as an undergraduate admissions counselor and said she is strict about not going over her allotted budget.

“I find that money goes further when you plan for it,” Nelson said.

After you take care of your essential payments such as food and rent, Nelson said she advises spending your “fun money” in the smartest way possible.

“Always look for sale items. When you go to the store and really want a T-shirt, go to the sale rack and find something you’ll really like. It will save you money,” Nelson said.

For those who haven’t made a budget before or don’t know where to start, the Career Center can help. You can get one-on-one advice with success professionals, like Terrazas, to get a better grasp on budgeting.

Budgeting takes trial and error, Terrazas said. The Success Data report on the Career Center’s website can help students who need assistance researching what a typical starting salary looks like, since starting income is the foundation of every budget.

“It’s extremely important to make sure you understand what your salary is and how that compares to other recent graduates,” Terrazas said. “It’s a good tool to really get a grasp on what [your] starting salary should be.”

The Career Center is located in the West Wing of the Sid Richardson Building.