After graduation, you have to build a career, pay bills, and deal with multiple adult tasks you may not have faced earlier. Furthermore, you may not be making enough money to cope with all the living expenses, loans, etc., in your first job. Taking all of this into account, it is crucial to control your finances right after graduation from college and even earlier. Below, you will find the most useful money tips.
Do Not Wait for the Perfect Job
It will probably not come quickly, if at all. Too many graduates simply wait for the perfect job to find them. Rather than doing so, get in the game, create a network, and get a job as close to the one you want. Consider moving to the city where the job of your dreams is and start making connections. Most of the opportunities in life come through personal connections, not through applying to a job posting online. Many job searches are rigged, so it is important to use any chance to get in the side door.
Learn to Save First and Spend What Has Left
Try to save about 20% to 25% of your paycheck, and then spend the rest having as much fun as you can. While it is important to save as much money as you can, if you manage to save that 25%, it will be perfect. You can spend with no sense of guilt knowing that you are saving more than the vast majority of people and getting an enormous head start on building wealth.
Learn to Use a Budget
Start using a monthly budget that will help you plan your expenditures. It does not necessarily have to be restrictive, but it makes it much easier to reach your goals when you have a limited income.
To create an adequate budget, you will need all your monthly bills, credit card, and bank statements from the last several months. From there, you can figure out how much money you are spending on necessary and unnecessary categories of goods, and then you can set a limit on spending in specific categories. Usually, thanks to tracking your expenditures, you will tighten up and spend less so that it will be much easier to save.
Many people, especially recent graduates, are afraid of investing or think that they must wait until they have paid down their debt to invest. Actually, the earlier you start investing, the better. You have time on your side. It is the biggest investing advantage of all, so use it. Waiting for the future when you start making more money is the biggest mistake. Because if you start investing at 30, you will have to save at least two to five times more to build the same amount of wealth as if you started at 22.
Build an Emergency Fund
It is also necessary to set aside at least three to six months of expenses in an emergency fund. This should be the money that you never plan to touch. Having even a couple of thousands of dollars can help you when you are struggling. Experts recommend putting the emergency fund into a high-yield savings account so that you are sure that you will use this money only when necessary.
These funds are typically reserved for the times when you lose a job or face a loss in income, significant unplanned medical expenses, unexpected home repairs, and other spendings that could easily unsettle you if you did not save for them.
Use Credit Wisely
Experts recommend using credit cards to your advantage, but doing so with a plan. You should only borrow money when you can afford to pay it back. Never use credit cards for purchases you cannot pay off when the bill comes due. It is OK to use credits to earn rewards, also. But do not pursue rewards if earning cashback or travel rewards tempts you into spending more than you can afford.
Additionally, ensure to pay all the bills timely, including student loans, to build your credit score. So that you would not worry about falling behind or forgetting to pay bills on time, you can set them up on autopay.
Minimize Your Biggest Expenses
These spendings include housing, eating, and commuting. Do everything possible to live rent-free. Check out house hacking and figure out if you should rent or buy. Sometimes, you can afford to buy much cheaper than renting. Housing expenses are always the biggest expenses, so you should do everything possible to reduce or eliminate them and invest the difference.
Food is one more big expense. You can use plenty of ideas and tips on how to save much money on food while eating healthy and maintaining a balanced diet.
The third main expense is usually commuting. Search the internet for tips on saving money on commuting costs. Consider walking or biking to your work. However, these options are not always the most advantageous.
Consider Refinancing Your Student Loans
If you are leaving your college with your share of student loan debt, remember that you are not stuck with all these loans for the rest of your life. Check if there is a possibility to refinance your student loans into a new loan with a lower interest rate and better loan terms. If it is possible, the process of refinancing will become much more feasible.
Ensure to Chill As Hard As You Hustle
This tip is last, but definitely not least. Hustle hard while you are young because it is the best investment of your time, connections, and money. But make sure to chill out hard, too. In these times, it has never been easier to burn out. You can see 20+ years old burn out all the time now. So take a deep breath in, and chill out. Your energy is not limitless. We all need enough time to recover.