College Graduate's Guide to Finances
College graduation is a huge accomplishment. It is also the event that marks the beginning of a new part of your life. Whether you have been on your own while in college or if your parents have been helping you out, you are going to take on additional expenses and responsibilities. Your relationships may change, you may move to another city and you may have additional responsibilities to think about. It’s important to be prepared and to enter this next portion of your life with a plan. You may want to keep your expenses similar to what they were in college, to help set up a solid financial future. This guide will help you get started planning for the future.
The first thing you need to do is to check on your student loans. You should have a six-month automatic deferment period, but sometimes there are mistakes and your student loans may come due sooner. You need to call your student loan provider and make sure that you have the six-month grace period.
Additionally, you should look at your different payment options to make sure you can afford the payment once it comes due. Consolidating your loans may be necessary if you borrowed a large amount. Consolidation can lower your monthly payment. It is also important to keep your contact information updated as you move so that you do not miss scheduled payments.
Finding a New Job
Many college seniors graduate without having a job lined up. This should be your top priority in the months leading up to graduation and right after graduation. There are a lot of job search resources available for graduates including the alumni association and career resource center at your school. Take advantage of them. You should do everything you can to make it between college and your first job without going into a lot of debt, which may mean taking on a part-time job while you look for your current job.
If you lived on campus or shared an apartment with your friends, finding your first apartment on your own may be a bit different. You may also decide to move back home temporarily while you look for a job. It is important to have a clear plan when looking for a place to live and to choose something that you can afford. Your housing costs should end up being no more than 25% of your budget.
You may want to spend even less if you have a lot of debt that you need to take care of. It can be difficult to find affordable housing in some parts of the country, which may mean that you need to continue to live with roommates.
Starting Your New Job
When you start your first job, it is the best time to start good financial habits. If you start contributing to retirement now, you will not miss the contributions that you are making, because you are setting up a brand new budget. It is important to take advantage of the employee benefits you get like health insurance and any matching contributions to your retirement account. Take the time to understand your benefits so that you can use them if you need them.
Creating a Financial Plan
Now that you are starting a new chapter in your life, it is a great time to write down a financial plan. This plan can help you be ready as the next milestones come up over the next few years, whether it is getting married, buying a home, starting a family or opening your own business. A financial plan will help you to save and plan for each of those events in the order that you want them to happen.
Even though life may not happen exactly as you plan it, taking good care of your finances can make it easier to change those plans and still reach your dreams. Be sure you include these 5 steps in your financial plan.