Managing Your Money After Graduation
Congratulations on your recent graduation from college! Now that you have a degree, there’s a world of possibilities ahead, and it’s time to start thinking about your future.
As you begin this new phase of your life, finding a job and choosing a place to live are surely your top priorities. There’s something else you need to think about, though: your finances.
Your college degree will open many doors leading to opportunities that will allow you to advance your career and earn a good income. However, as exciting as it may be to receive your first paycheck, it’s important to know how to properly manage your money so that you can set yourself up for financial success.
To get you started out on the right foot, here are our top tips for managing your money post-graduation.
Find Out Where You Stand Financially
Before you can determine the best way to handle your finances, you need to determine where you stand financially. This means figuring out how much money you have and how much you owe. Calculating your income versus your debt helps you determine where cutbacks may be needed.
While your income may be easy to figure out, determining your debt may take a bit more work. If you have student loans, it’s vital to find out the balance remaining. Contact each of your lenders and ask them for a total. If you have more than one student loan, you may want to consider consolidating to make repayment easier to manage. In addition to your student loans, you also want to tally up all other payments, such as credit cards, car loans, and insurance.
Once you have a total for your monthly expenses, subtract that number from your monthly income so that you can find out how much you have left to work with.
Determine Your Living Expenses
The expenses that you are going to encounter post-graduation are vastly different from your expenses in college.
Your new expenses will likely include a monthly rent or mortgage payment, utilities, a car payment, insurance, and incidentals, such as food and clothing. For many college graduates, these new payments may be a shock. If you don’t have a firm understanding of your post-graduate living expenses, you could end up in financial trouble.
Avoid Accumulating New and Unnecessary Debt
After you graduate, you’re probably going to start receiving lots of offers from credit card companies and other lenders. Many college graduates take advantage of these offers, as they believe they offer a sense of financial freedom. Down the road, however, they can lead to financial trouble. New debt means an extra monthly expense so that the amount of money that you have to work with will tighten up.
It may be tempting to take out a new credit card, as it will allow you to get the things you want in return for a small monthly payment; however, the more debt you acquire, the more you put your financial future at risk.
After you graduate, it’s a perfect time to assess your finances and set yourself up for success. The earlier you have a handle on your finances, the better you will have a strong financial future. Have you constructed a solid financial plan after graduation? How is it working for you? Please feel free to leave your comments below!