So, you might be reading the title of this blog and asking yourself "is this a joke or something?" I know how scary finances can be to think about, but it can be especially nerve-racking for soon-to-be or recent college graduates.
Well, it just so happens that I graduate in less than two months... and let me tell you something: I knew nothing about finances until a couple of months ago. However, I decided to sign up for a personal financial planning course at my university, and I can honestly say I have learned so much about how to save money and how to spend my money more efficiently.
I know finances aren't the most exciting topic to discuss, but I think it is important to talk about! So, here are 6 essential money-saving tips for college graduates:
1. The most important suggestion I have for recent college graduates is to budget, budget, and budget some more. A great tool to do this is by using excel, which allows you to create an organized and clean looking budget. You can create categories, consisting of rent, utilities, phone bills, essentials, non-essentials, groceries, etc. Creating a budget can help prevent you from overspending and purchasing frivolous and unnecessary items.
2. Another essential tip regarding finances is to establish an emergency fund. The most unexpected things can happen, and you should be prepared for that. Whether you lose your job out of the blue, or get into a car accident, you should always have money saved up on the side to help contribute in case of emergency. Setting up an emergency fund will hopefully give you a little peace of mind and comfort.
3. A mistake a lot of young graduates make is applying for as many credit cards as they possibly can. Credit cards can be a great thing, especially because they are necessary to build your credit, which then allows you to buy a home or rent an apartment. However, no bank or loan officer is going to deem you as a worthy borrower if you aren't responsibly using your credit cards. Once you do this, you can kiss goodbye your dream home or car. The last thing any recent college grad wants is to build up a load of credit card debt that could hurt you financially. You don't want to be paying back credit cards for years and years, so please establish and track your credit responsibly.
4. Another crucial tip to help save college grads money is by paying off student loans. Although you only have a minimum monthly payment, it is wise to try to pay more than the minimum. The sooner you pay off your student loans, the sooner you will have extra money to put in your savings account. Also, if you pay your loans off promptly, you will end up paying less interest, which is always a good thing. You don't want to be paying of your college loans when you are in your 50's; you want to be able to enjoy life and not worry about something like that.
5. Something I think a lot of college grads don't do post-graduation is live within their means. Living within your means is a vital part of being financially stable and successful. When you receive your first paycheck, don't automatically think that you can attend every happy hour and eat out almost every day. 9 out of 10 times this is not the case. You need to calculate the exact amount you can spend on leisure activities so that you don't end up living outside of your means.
6. And this last one might sound crazy to some people, but trust me, this is a vital step in saving money. You need to plan for retirement. Yes, you should start planning for retirement right after you graduate and start working at your first real job. It might seem like retirement is a long way away, but trust me - it is never too early to start saving up for retirement.
I hope these tips and tricks help guide you in the world of finances after graduation. I know it can be hard to plan and budget, but it will all be worth it in the long run!
How do you save money? We'd love to hear your tips and tricks!
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