Life after graduation can feel like you’re moving into a new world as a college student.
You’re stepping into a new age of responsibility and opportunity. Maybe you’re kicking off a new career, moving out of campus housing and into a new apartment, or pursuing a placement opportunity. Wherever your life takes you now, it’s essential to ensure that you have your finances in check.
Fortunately, although life after graduation can be confusing, there are a few steps you can take to ensure that your cash issues don’t get the best of you as you move into this exciting new stage in your life. Here are our top tips to get you started.
1. Have a Budget That You Update Regularly
The first step to effective money management is understanding where your cash is coming from and where it’s going each month. Figure out how much you earn from your job, and how much you need to put towards essential bills and expenses. Once you’ve got your initial must-have costs out of the way, you can start thinking about your long-term saving goals and where you want to spend your leftover money.
If you’re a tech-savvy person, you can always download an app onto your smartphone that will help with your budgeting strategy. There are plenty of tools out there today that were specially designed to help today’s consumers control their finances.
2. Understand Your Living Expenses
You may have started to get used to things like living expenses when you were in college. The chances are that you had to pay for things like transportation, food, and even your course materials. However, you may have even more expenses to handle now that you’re going alone, including new rent or mortgage costs.
When setting up your budget, make sure that you have a complete list of all the expenses you need to handle to guide you. For instance, don’t forget about health insurance, car payments, car insurance, and other less common expenses too.
3. Establish an Emergency Fund Fast
As much as we like to stay positive, it’s worth noting that you can’t always prepare for the various ups and downs of life. Things can change in your world very quickly, and an emergency fund is how you protect yourself when you run out of cash faster than you thought you would.
Your emergency fund is there to help you out if you suddenly lose your job, you need to pay for an expensive repair, or your car breaks down. As the go-to safety net for your financial issues, your emergency fund is one of the most valuable things you have, so make sure you start building it as quickly as possible.
4. Track and Build your Credit
Setting goals is crucial to accomplishing your long-term financial goals. However, you may find that a lot of those goals involve borrowing money. For instance, you might want to buy a great car, or put a deposit on a new home. If your long-term goals require you to think about your loan options, then the best thing you can do to manage your budget now, and in the future, is to get to work on your credit score.
Building a good credit score is a crucial step for any savvy consumer. The better your rating is, the more likely you are to be approved for better deals when the time comes to borrow money. With better deals on your loans, you won’t have as much to pay out in interest. Good credit can even boost your chances of getting a great job!
5. Live a Frugal Lifestyle
One of the great things about being a fresh graduate from college, is that most of the people you care about (your friends and loved ones) are likely to either be in the same boat as you financially or understand your financial situation. With that in mind, the people around you should be available to help you live a more frugal lifestyle.
Get help from your friends when you need to come up with cost-saving ways to have fun and keep costs low. You could even consider having nights in at home with your friends, rather than going out to eat or drinking at a local bar. It’s also worth telling the people that you care about that you’re doing your best to live within your means. This will help them to stay supportive when you’re most in need of their help and guidance.