Some of you may be wondering what financial guidance to provide your children who are graduating college or starting their working careers. I use the information below for personal reference and I thought you might find it useful. I pay attention to my budget and organize my money by waterfalling it into different “buckets”, listed below.


Be intentional! No matter what your strategy is, be mindful of what you spend your money on. Some find it helpful to track expenses using apps or writing them down. Personally, tracking my individual expenses became tiresome. It was useful for me to see what my average monthly expenses were and where I could cut back on spending, but I found setting a savings goal works best for me. My goal is to save 20% of my salary.

I know what my salary is, I know what my fixed expenses are, and I have a good idea of what my personal spending is each month. Using these numbers, I can gauge what is available for saving and what adjustments need to be made to reach my savings goal.

How do I act on this information? I am paid semi-monthly and have found that setting up automatic semi-monthly transfers helps greatly and makes saving feel effortless. My paycheck deposits directly into my checking account. Two days after each paycheck deposits, I have money auto-transfer to all the accounts listed below. Some transfers started at only $20 per month, until I found what worked with my budget, but getting started was the key to feeling confident and making improvements.

Once the savings have transferred, I am left with a set amount of money to get me through the month. If I go over my budget, it pains me to transfer money back from my savings to my checking account. I also set up an intentional two-day delay in transferring money from my checking account to each savings/investment account. This is because I know there are unexpected expenses some months that are unavoidable. The two-day buffer gives me time to cancel a transfer if needed so I can make sure that I can still meet all my expenses.

Accounts I Use and Funding Priority

1. Checking: Daily and monthly expenses

  • I keep 1 full month of expenses in here.

2.  Savings: Short-term goals and fun – concerts, long weekends, vacation, etc.

  • The amount varies but I try to keep $2,000 in here for my splurge activities. Nice to have access to cash quickly if you have a higher expense month as well.

3. High Yield Savings: Emergency fund – don’t touch!

  • I keep 3-6 months of living expenses parked here.
  • Safety net for the unforeseen accident, medical emergency, lay-off from work, etc.
  • Operates like a savings account but offers a higher interest rate compared to traditional savings account.


Once my checking account and emergency savings are funded – I move on to growing my money and thinking long-term using the investment accounts below.

4. Company 401k: Retirement

  • Top funding priority once emergency fund savings are met.
  • Contribute at least the amount necessary to get employer match – it’s “free” money.

5. Roth/Traditional IRA: Retirement

  • Contribute the maximum allowed $6k per year for individuals under 50.
  • Great opportunity for long term, tax-free growth.

6. Individual Brokerage: Broad

  • This is a taxable account, and you can access these funds at any time.
  • I view this account as flexible. Anything “left over” I put in here or consider contributing additional funds into my 401(k) plan beyond the employer match. While funding the maximum contribution to a retirement account is optimal, I might direct some excess dollars here instead, depending up my other objectives. For example, I might tap into these funds later to use for a home someday, a larger vacation later in life or other long-term goals.
  • Can be seen as an extra layer of an emergency fund since it is accessible without penalty.

Modera has many other resources on budgeting, saving and general financial literacy topics that might be useful for a college graduate or someone just starting out in their career. Please reach out to your wealth manager to learn more.

If you have tricks you use for personal budgeting and are comfortable sharing, please send them to me at I would love to hear from you.


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