Your Post-Graduation Finances

finance_tips.jpgYou got your first job out of college and if you nailed the job before graduation you are probably feeling pretty good about life after college. You decide to live with some other grads in order to save some money. You have no more homework, you are all grown up and independent and ready to conquer the new job. But wait, you have to pay bills, buy groceries, regularly buy gas to drive to work and find nice furniture for the apartment. And, don’t forget that student loan payments will be starting soon.

If this is your situation, you are not alone. College graduates are experiencing this every year and it is undeniably the natural transition of life. Budgeting worries can get stressful especially when you still want to have a little fun. With a little bit of discipline and decent spending habits life will be back to normal in this new and exciting reality we all call, “the real world.”

Prioritize Your Paycheck
After you get the first paycheck from the new job, determine where the money is going. Pay yourself first by putting money in savings and it will pay off in the long run. How much? A general rule is that for every $1 you make put 10-20% in savings. Once you make this a habit it will get much easier.

In addition to savings, consider the needs in your life, like rent, car insurance, student loans, phone bill and groceries, as the next big category. This should be about half of your take home pay. After savings and needs, the rest of the money can go to your wants. Just remember that having extra money doesn’t always mean you have to spend it right away.

Pay Bills on Time
Hopefully you are not coming out of college with a lot of credit card debt, but if you are it is important to get that taken care of as soon as you can. Your GPA and test scores were important to you in college; make your credit score just as important to you after college. If you are struggling, pay the lowest monthly payment in order to hang on to good credit. Most payment plans can be managed online and automatic deductions are the norm. Set this up to avoid late payments and so you don’t have to worry about losing the bill in the mail. To see your credit score visit or call TransUnion, Experian or Equifax to get a free update. Keep track of where you are in order to build wealth especially if you want to buy a car or house in the next couple years.

Live Within Your Means
This may be hard to do when you are making more money than you ever have before. It is exciting to get a big paycheck and be able to buy anything you want. Although if you look at your paycheck after all your “need based” bills are paid it’s really not as high as you think. A lot of people struggle at this age so don’t expect to be rich right away. Get creative with your friends. Have a movie night at home instead of going out every weekend, make dinners together instead of going out to eat and don’t be afraid to say no to the regular shopping trip. It’s hard to say no to something you want but the next day it usually feels pretty good.

Things will get better. As long as you are being smart and disciplined you shouldn’t get caught in the hole. For college graduates, this time of transition is the final and most important test, the real world survival test.

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