Most people start their lives after college graduation in debt. Not only have they been charging their textbooks, groceries and gasoline purchases to their credit cards for four years, but the average college grad owes upwards of $20,000 in student loans. But don’t let your debt get you down after graduation; you simply need a plan to stay alive financially.
Get a Credit Card
If you’re going to attain financial independence, you need a credit card or two to start building your credit file. “Find a card that offers you reward points or cash back,” says financial guru Dana Leavy of Houston Financial Advisors. “Not only do you want to have great credit, but you also want to get something out of the money you spend.”
Leavy also recommends paying back your balance at the end of every month. “Deduct the money you spend with your credit card from your check book register,” she suggests. “Pretend like you’ve spent the money with your debit card and you won’t have trouble paying the bill.”
Invest in Your Job Search
Many college grads think that they can survive the job market with the same hair cut, clothes and presentation that they used as they slept through classes in college. This won’t impress potential employers, however, so invest a little money in improving your job search. “You need a nice suit, a professional hair cut, a fancy pen and a briefcase,” Leavy says.
This doesn’t mean that you need to spend thousands of dollars on a new wardrobe. A $200 suit with a pair of $80 shoes should suffice for interviews, and you might want to purchase a cell phone plan that will accommodate all of the calls you’ll be making in search of work.
Forget the High life
As a college grad, you might have dreams of posh apartments in thirty-floor high-rises or a $40,000 car. This isn’t realistic, however, when you’ve got living expenses and debt to pay off. Recent college grads can survive financially by living as frugally as possible. An inexpensive apartment with a small, fuel-efficient vehicle should do. Think modestly.
If you are worried about stacking up in the financial apartment, Leavy suggests that you talk to your parents about helping you out for a few months. “Parents know that their college graduates are struggling when they first leave the safety of their college campus, so ask about lending you a hand.” Some college grads even choose to live with their parents until they find a decent job and save some money.
Shop the Discount Stores
Whenever possible, college grads should shop at discount retailers, such as the Dollar Store. This puts a smaller dent in your budget, and if you use the aforementioned credit card, you can save earn rewards while you save money. Just be careful that you compare prices at discount stores. Some things are cheaper when everything’s a dollar, and sometimes you can get the same item for $0.69 at the grocery store.
Open a Savings Account
It’s never too early to start investing in your financial future, and a savings account is a great place to start. Even if you only put $3.00 per week into the account, the interest will help it to grow. “Once you have enough money in your savings account to meet the minimum, transfer everything to a Money Market account,” suggests Leavy. “The interest rates are higher and you’ll be less likely to touch the money because of the fees associated with [premature] withdrawals.”
Determine Student Loan Repayment Options
If you are lucky enough to get a great job right after college graduation, you might not have to worry about repaying your student loans. If, however, your financial future is uncertain, get in contact with the lender for your student loan as quickly as possible. Ask about repayment options that will fit your current budget.
Order Copies of Your Credit Report
You are entitled to one free credit report each year from the three major credit bureaus, so take advantage of this opportunity. If you know exactly what is on your credit report, you can customize your financial decisions to suit your available options. Don’t assume, however, that just because you have a positive credit rating, you can be irresponsible in your spending practices.
College grads will make a few mistakes, but you don’t have to let those mistakes ruin your financial life. Talk with your parents, a financial advisor or your bank to help you stay on your feet, and try not to live outside your means except for the occasional splurge.