College graduation can be intimidating, especially if you’re thinking about your future finances. With student loans, the responsibility of living independently, and making other financial decisions, it’s no wonder some college seniors feel overwhelmed. Of course, the key to money success is sound planning, and below are 4 tips to help you start your post-graduation life the right way.
Cut Overhead and Budget Wherever You Can
Moving on and possibly getting your own apartment can be one of the highlights of graduating from college. However, until you find a stable and well-paying job, it may be wise to either find roommates or live with family until you can save money.
When you graduate you will not know exactly what your expenses will be. Paying rent often takes up 30% (and many times more) of your income. This is money that you can save for a few months while you relocate to your new job, apply for a job, or pay off student loans. Keep in mind that this is a temporary solution–the sacrifices you make now will pay off handsomely later on.
Start Making Money Quickly
When you graduate, you may not be able to find your dream job for some time. Expect to have some downtime while you search for employment. This, of course, doesn’t mean that you can’t start making some side-money in the months before you graduate. Getting extra income doesn’t mean you need to take too much time out of your schedule. If you’re good at something and can sell your services as an online freelancer, you could sign onto websites like Elance or oDesk, where you can do anything from graphic design to editing.
The few hundred dollars that you can earn from your side job will take some of the stress of making an income. It’ll let you look for a job, and if you start doing it before graduation, you’ll have a head start.
Hold Off On Buying A New Car. Start Paying Debt Instead
When you start working after college, you will certainly need to have reliable transportation. However, don’t purchase a new car if it means you’ll be making payments on it every month. If you have student loans or some other kind of debt, it’s wiser to save up enough cash to buy a used car, and then focus on paying off your loans.
The quicker you begin to pay off your loans, the more interest you’ll save in the long run. Some people choose to “snowball” their debt; meaning, they start by paying off the smallest amount first. This will not only lower your monthly payments, but psychologically, it’ll make you feel as if you’re being proactive about the debt you have.
Take Advantage of Your Alumni Benefits
School is expensive, but part of that expense (aside from your education) is the benefits you get. Before bidding farewell to your alma mater, see what types of alumni benefits you will have. Some alumni benefits can save you money on travel, car insurance, and sometimes you’ll even have access to an online networking system with other alumni, or access to your career center and career fairs.
While graduation is a big step, it’s important to be prepared. Some college seniors become so overwhelmed with decisions that they become stuck in indecision. You don’t need to have absolutely everything figured out, but you can at least start thinking of small ways you can cut costs, save up money, and pay debt. Where there’s a plan, there is sound financial success. Remember that being on a budget and planning your expenses is something everyone should do before they graduate. Whether you’re thinking of traveling for a year, or are moving into an office job, the above are tips that you can use right now.
Image Attributions: UBC Learning Commons