Life, after you graduate from college, can be tricky! Apart from all the challenges you need to face after graduating from college, it also opens a new path of opportunities and responsibility. You are most likely trying to establish a stable career option, moving out of the campus, and trying to become financially independent. To help you control your finances after you graduate, we will discuss some points on how to save money after college?
Here are some of the essential tips.
- Start with a budget: The first step in understanding your expenses and budget is to know where your money is coming from and where you are spending it. Establish a monthly budget. This is an essential factor that would ensure that you have long-term financial health. Since you belong to the tech-savvy generation, you can always make good use of your smartphone to find jobs that suit your expertise. You can also make use of a suitable financing application to automatically track your expense records, account balance, and credit on the go!
- Understand your living expenses: Whenever you leave the comfort of your campus housing, you will get to know how costs tend to add up quickly. Right from the most basic requirements, such as transportation to rent to various utilities, you will suddenly get to know that many expenses add up, which were nonexistent at some point in time. Ensure that you make considerable adjustments to your budget and understand how costs will vary based on the service packages and time of the year. This will allow you to make intelligent financial decisions that would suit your earnings and needs accordingly.
- Make necessary plans for your retirement: Now, this might sound crazy, yet it is never too late to start saving! Even though retirement seems far way away since you just started working, automate your earnings accordingly so that a part of your money goes directly into the savings account.
- Pay off student loans: A recent survey has shown that 70% of the recent graduates will be passing out from their universities with a loan. This study has also shown that the average 2015 graduates still have $35,000 of student loan debt. While it can be tempting to pay small amounts of the loan every month, we advise that a less aggressive payment option be made. The sooner you clear off your loans, the less interest you would need to pay and thus put in more money in your savings account and plan a treat for yourself. You can also opt-in for various options on refinancing student loans. Once you can pay off your student loan debt, you can plan a treat for yourself!
- Keep an emergency fund at hand: It might not be a pleasant thought for anybody, but emergency funds are much needed to protect you from life’s unexpected and costly events. It could be that your car breaks down at any moment or you get injured, or due to some unavoidable circumstances, you lost your job. Having these safety funds in your hand could lead to providing you with financial peace of mind. To initiate your emergency funds, start by putting away $1000 from your earning. Then start by putting in spare change or even a tiny amount of money from your earning every month. Continue this procedure until you have a month’s rent for your place. Your main goal is to reserve this fund only for critical emergencies.
- Establish and track credit: Building credit and having a good credit score is one of the main factors when you think about how to save money after college. Having a good credit score is mandatory since it implies that you are a responsible borrower and worthy of taking loans for significant investments such as a home or a car. To maintain and build a good credit score, we advise that you should keep your oldest credit card open, and pay your bills on time.
- Always pay your bills on time: It is mandatory to keep track of your expenses and clear off all the pending payments. This would help you to avoid any hefty late fees and negative impacts on your credit rating. To avoid late payments, consider automatic scheduling payments, setting calendar reminders before the due date of your bills, and downloading applications that would help you keep track of the pending payments and notify you to clear them on time.
- Live within your means: Lunch, dinner, and happy hours need to keep at pause if you tend to spend too much! All these might look tempting when you receive your first paycheck; however, daily or weekly luxuries would eat away at your budget fast! It would be best if you avoided such circumstances. Identify a few critical “luxuries” and dining out once or twice a month is appreciated. However, do not end up spending more than what you earn. This will give you peace of mind and help you to spend responsibly.
- Become a social deal seeker: One of the most common things about being fresh out of college is most of your friends are in the same financial boat. All of them are cash-strapped and paying their debt on time but again free from various ties such as family’s financial responsibilities. Keep your college friends together in one place and grow your new circle of friends where you need not spend much! Low-cost activities such as picnics, free outdoor activities, and pickup games. You could also look for exciting and affordable activities on sites like Groupon, LivingSocial, and Gilt.
- Set a long-term goal in your mind: While you make a budget for your monthly expense, keep in mind that it doesn’t always mean that you are only saving! You are free to get yourself a new couch, a tropical vacation or a dream home. But again, setting a long-term goal will motivate you to stick to your budget, and you will be rewarded soon for your financial responsibilities. While you look at your bank balance to have a considerable amount for a trip to the Maldives, you would find it easy for yourself to spend appropriately without the need to think about any financial crunches.
Yet again, we hope that once a fresh graduate gets a new job, they can’t party every week since the work pressure is quite intriguing. You would be provided with loads of work, and being a fresher, you have to adjust to the work schedule accordingly.
There is also no need for you to wait for the perfect job! Too many people stay on the sidelines, waiting for the ideal job for their level of expertise. Keep in mind that you always need to start from somewhere, irrespective of the workplace. So don’t keep waiting for the PERFECT job. Get yourself a place in that start-up and start working your pace up your career!