One of the strangest transitions is going from being a poor college student one month to being a college graduate with a full-time salary the next month. Just like that, life as you knew it changes into a life you have been working towards. It probably won’t even hit you until you log into your mobile banking app and see your first paycheck deposited into your account. Your past summer jobs and internship paychecks seem like nothing in comparison, and you might think to yourself “Wow, I am rich!” After you take time to appreciate all the hard work you put in to finally landing a real job, there are few things you need to be aware of as your income increases. Since you are now exposed to new financial responsibilities as a college grad, here are some money tips to help you manage your post-grad life.
1. Start Budgeting Right Away
If you chose to live on your own immediately after graduation, there are going to be quite a few new monthly bills. Start thinking about what you really need. While rent payments aren’t really escapable, there are more things than you think that you can cut back on. Whether its grocery shopping with your roommate or unsubscribing from streaming services that you don’t really need, saving money where you can is important. Breaking down how much money you receive monthly, and understanding how much of that you need to spend towards bills, will put you in the best position to start.
2. Keep Living Costs as Low as You Can
Depending on where your job is located and if your parents are charging you rent, living at home rent free would save you money, big time. If its feasible, spending 1 to 2 years at home post-graduation will cut back on costs on all sorts of things like rent, food, WiFi, and laundry. Although it may not seem like the most attractive offer, saving up money now will put you in a better spot for your first apartment in a couple of years. If you need to move out, make sure you take the time to look for the smartest option. Don’t just jump into a lease without knowing how much you can afford. Explore your options and consider living with roommates, as they can lessen the monthly expenses.
3. Start Managing Your Student Loans
Ah, yes. What may or may not have been hanging over your head all throughout college is finally about to start requiring some payments. The best advice is to start right away, ignoring your student debts doesn’t make them go away. Websites like Credible help outline your refinancing options and get you started with your student loan payoff schedule.
4. Set Up Your Retirement Fund
You just started working, why should you even think about retirement, right? Actually, the earlier you start thinking about retirement, the better off you are going to be later in life. Make sure you understand your company’s 401(k) retirement plan so you can start putting some of your paycheck towards the future right away.
5. Set Up Long Term Goals
As you continue to grow up, there are going to be big purchases you want to make like your own car or home. Putting away money little by little even when you just graduated can help you reach these goals quicker. Take advantage of certain budgeting apps like PFM tools that can help you plan and budget your money. Lastly, make sure to enjoy your post-grad years. Having all of this new money means you dohave some room to celebrate on life experiences.
6. Open a Savings Account
If you haven’t realized already, a savings account is something every college graduate needs. It is helpful to automatically send a certain amount of your paycheck to your account; this way, saving will become like second nature. Having a savings account is different than setting up your 401k, now you will have a fund that you can dip into when you want to buy your first car or move into a new apartment.