Managing Bills as a Young Professional
Learn how to manage your money on your own with tips from Citizens Bank
When you enter the workforce as a young professional, you'll be faced with the responsibility of paying bills and managing finances on your own. To help you prepare for the new expenses, Citizens Bank has provided a list of the standard costs and utilities for young professionals as well as tips for bill management. Our mobile banking and online-accessible checking accounts can also be great resources as you get started. Learn more about how to manage your money below.
Create a budget and emergency savings account
An important part of any young professional's money management plan, a budget can help you live within your means and pay bills on time - if you stick to it, that is. Starting with your net monthly income, outline your existing expenses like monthly car and student loan payments, then determine the maximum you can pay each month for rent, utilities, groceries, a gym membership and more. It's important to use your net monthly income as health insurance expenses, pre-tax withdrawals and taxes will already be accounted for.
By creating a budget before you take on any new debt obligations, you are more likely to choose options with payments you can afford. As you create your budget, don't forget to account for monthly contributions to an emergency savings account to cover at least three months of your expenses.
Understand the new expenses and bills you need to manage
As you create your new budget, you may be wondering what expenses you need to include. When you're out on your own for the first time, be sure to plan ahead for the following essential and optional expenses:
- Utilities (phone, gas, electric, and possibly water).
- Student loan payments.
- Car payments if you have one.
- Car/renter's insurance.
- Gas/parking for your commute.
- Contribution to emergency savings account.
- Medical expenses.
- Credit card.
- Apartment furnishings.
- Charitable donations.
- Gym membership.
- Additional payments toward the principal on your loan.
- Allowances - set aside funds each month to pay for new clothes, gift purchases, meals out, and car repairs, maintenance and registration fees throughout the year.
- Contribution to retirement savings account.
Not all of these expenses will have a direct bill, but they should be accounted for in your budget.
Create a bill management system to make payments on time
When it comes to managing monthly bills, it's important to find the system that works for you. Some choose to pay them all at once; others choose two or more dates throughout the month and assign bills to be paid on those dates. This can work well if you get paid bi-weekly and have bills due at different dates during the month. To start, consider paying bills due the 12th - 26th on the 10th, and paying bills due the 27th - 11th on the 25th.
Automatic bill management can help you securely and easily track and pay new expenses. With the 100% online guarantee from Citizens Bank, most payments will be made within 24-48 hours, and we'll reimburse you for any late fees if an error is made during processing. Sign up through online banking and set up automatic payments to be remitted on time for bills that remain the same each month, like rent, student loans, savings contributions and more. For your more variable payment amounts, like credit card bills, utilities or charitable donations, simplify bill management by setting up payees and making manual payments from your checking account through online or mobile banking.
Tips for managing bills for the first time
Looking for ways to lower your new bills? Learn how to manage your money with these tips for lower payments:
- Shop around for car and renter's insurance every few years to make sure you're still getting the best deals.
- Pay extra toward the principal of your loans at the beginning of the year to reduce the interest on your payments and pay down the loan faster.
- Research budget plans from utility companies that estimate your annual cost - allowing you to pay the same amount each month to lower or simplify payments.
- Pay down credit cards in full to avoid interest on the next bill.
Open a low-maintenance One Deposit checking account from Citizens Bank
When you're just starting out and learning how to manage your money, the last thing you need is a checking account that hits you with fees for low activity or a low balance. That's why Citizens Bank created the One Deposit checking account, which waives the monthly maintenance fee when you make just one deposit a month. Plus, it provides easy mobile and online checking account access so you can track your balance and make payments from anywhere. Consider setting up direct deposit for your paycheck to ensure you always have the funds to waive the fees and pay your bills.