After 12 years in school and another 4 years of college, you finally earned the right to toss your graduation cap in the air in celebration, only to have it come crashing down to the overwhelming reality of student loan debt, sky high living costs and major “adulting” decisions you feel painfully unprepared to handle.
Though college is more expensive than ever, most of us graduate without the basic money skills we need to survive — and that absence of financial awareness can be costly.
So, I’m offering a few ways to speed up your financial learning curve – no costly tuition required. Think of it as your post-grad money checklist.
1. Find your bearings
Getting comfortable in your “real world” shoes takes an adjustment, but it doesn’t have to be painful, as long as you’re prepared.
If you don’t have a job, get one. If you’ve already found employment, learn how your benefits programs work and understand how they may affect your paycheck. Take stock of your new expenses, including rent, transportation, utilities, groceries and more.
Most of all, be patient with yourself as you adjust to the rigors of your fabulous new life.
2. Understand your student loans
Knowing how your student loans operate is an important step to sound financial management. How much is your monthly payment? Is there a grace period before you’re required to pay back your loans? How high is your interest?
These are important questions to ask, and the answers will have a direct effect on your financial life. Seek them out and determine how paying your loans fit into your money plan.
3. Avoid debt
Since we’re on the subject, Iet’s talk about debt.
It might seem trivial, but avoiding debt is key to building real wealth. The more you owe, the less you can save. Tweet this
Steer clear of big purchases like cars and houses before you get settled. Be aware of your spending habits and avoid credit card debt like the plague. If you already have debt, pay it off quickly. The less debt you carry, the stronger your financial footing becomes.
4. Start a budget
Creating your first budget might seem like a chore, but it’s one of the best money moves you can make. But, just so I’m clear, budgeting doesn’t mean depriving yourself.
Put simply, a budget is your financial plan for the month. It helps you understand how much money is available and creates a strategy for using your funds in the most effective way. It’s also a great system to keep track of your newly acquired bills and expenses.
5. Build an emergency fund
As a recent college grad, it’s easy to feel invincible and forget about possible emergencies. However, unexpected expenses will inevitably arise, and they can destroy your budget if you aren’t prepared. Creating an emergency fund can help you avoid a budget catastrophe.
An emergency fund is a special stash of money set aside in a savings to handle unexpected costs. When an emergency arises, you dip into your eFund to take care of the expense. Not only will you have the cash to take care of the problem, you won’t have to bust your budget to do it.
Start saving for retirement
Failing to save for retirement is one of the biggest mistakes millennials make, but it can be easily avoided. Your retirement isn’t as far away as it seems, so use youth to your advantage.
Compound interest becomes your best friend, and saving money early will give your nest egg a huge jump start. Plus, you won’t have to play “catch-up” when you’re older.
So, start saving for retirement now. Your future self will thank you!
Are you prepared?
While graduating from college prepares us to meet many of life’s challenges, our fancy degrees often fall short when it comes to teaching us more practical fundamentals, like managing our money.
By following this post-grad money checklist, you can maximize your dollars and start building the life you spent all those years in school prepping for. Enjoy it!