Congratulations! At this point you’ve probably already sold back your textbooks, bought your cap and gown, and whether you’ve actually walked across the stage yet or not, you are most likely already celebrating. But now what? Have you started thinking about how you’re going to manage your finances? Here are some post-commencement step by step tips
Step 1: Get a job
Chances are mom or dad isn’t going to pay your way anymore. You need a source of income. Hopefully you are one of the very few college grads who have a job lined up straight out of college. If you are not (I sure wasn’t) it’s time to get to work sending out resumes and networking with the contacts you made throughout the past four years. Contact everyone you know and have them contact everyone they know until someone finally finds you a lead.
Step 2: Pay off student loans and other debts
Paying off your student loans can seem very overwhelming at first. If anything, you MUST at least pay the minimum amount each month but you should try to pay more. The sooner you pay them off the less you end up paying in the end. Decide on a date you want to have them paid off by and figure out how much you have to pay per month in order to make it happen. Don’t forget about your other debts like credit cards or car payment and keep an eye on interest rates. You may find that the interest rate on credit card is double or triple that of your student loans. Therefore you’d be better of paying less to your student loans and more to your credit card debt until that is paid off. It’s important to set up a budget so that you know where your money is going and that you have enough money to achieve your financial goals. Click here for a budgeting worksheet. And remember if you get in trouble there ares options!
Step 3: Change your lifestyle
Once your budget is calculated and you know how much money per month is going towards debts and necessities you’re probably going to realize that you don’t have much disposable income left. Instead of going out three nights a week you might have to cut it down to just one. It’s time to start looking for ways to cut back and become more frugal.
Step 4: Save, Save, Save
It’s never too early to save for your future self. As soon as you start that shiny new job you should start saving for retirement. Take full advantage of your employer’s 401K plan or open an IRA. Along with saving for retirement it is important to establish an emergency fund. The goal of this savings account should be 3 months living expenses in case of emergency. It seems like a lot but don’t panic. Start slow by earmarking a small percentage of every paycheck to this account. As you pay your debts off you can increase the amount that you save each week.
It’s all about taking it one day at a time and one paycheck at a time. Live frugally now, chip away at your debts, and save for the future. Your future self will thank you.