3 Secrets to getting rich

A new job and steady paycheck often create the temptation for recent graduates to spend more than they earn.

Kate Arndt, a financial planning coordinator at Bedel Financial Consulting, Inc., in Indianapolis, suggests three ways to get a head start on staying out of debt, managing expenses and saving for the future. Arndt is a 2016 graduate of Indiana State University with a bachelor’s degree in finance.

“The secret to getting rich is to live below your means!” she says.

  1. Beware of “lifestyle creep”

Arndt says the new thrill of getting a steady paycheck can result in what Investopedia calls “lifestyle creep”— when former luxuries become necessities. Take, for example, that daily stop for a latte on the way to work. At first glance, it seems like a small expense, but when you do the math, it adds up to a yearly expense of several hundred dollars. “Nip this poor spending habit in the bud by brewing your own coffee or drinking from the office pot,” advises Arndt. Think about your other frequent expenditures—fast food or music downloads, for example—and contemplate sticking that money in a savings account instead.

  1. Stick to a realistic budget

“Challenge yourself to live within your budget,” says Arndt. She suggests “envelope budgeting” as a good way to start. “Stash your monthly entertainment cash inside an envelope. Once you spend it all, you’re done. At least until the next month begins!” Budgeting apps such as Mint and You Need a Budget can help you keep track of your income and expenses and monitor your spending habits.

  1. It’s never too early to save for retirement

Many employers offer retirement plans (for example, 401(k) plans). If yours does, enroll and begin saving immediately. Don’t forget to take advantage of the matching contributions that many employers offer. “The general rule of thumb is to contribute, at a minimum, the amount it takes to receive the full employer match,” Arndt says.