Lots of coeds juggle jobs and bills while they’re in school, but unless they’re completely independent from their parents and financial aid, living in apartments and not dorms, they don’t always grasp the full weight of finances in the real world.
After graduation, those cold hard facts can hit you right in the face—and the wallet—so prepare yourself ahead of time.
1. Figure Out Your Real World Expenses
If you live on campus or commute from your parents’ house, you probably don’t know much about bills.
Oh, you realize that other people have to pay for electricity, heat, hot water, and Internet, but not so much yourself. Some students make it through school without paying for anything except their own cell phones; they don’t even have a car note.
There’s nothing wrong with that necessarily, but you have to face facts before you join the real world.
If you plan to rent an apartment or a house, start thinking about what you have to pay. If you’re not used to footing the bill for your utilities and luxuries, you’re in for a surprise the first time those bills come due.
Talk to your parents, friends who live on their own, anyone with financial independence. Get the skinny beforehand and save yourself a shocker.
2. Start Putting Together a Strict Budget
In addition to figuring out what bills you have to pay, you also need to put together a budget.
This won’t thrill you, but you need a really strict budget.
Unless you land a ridiculously high paying job right out of college, you won’t have a lot of funds—plus you’ll have to start paying back your loans within six months. You may not even have a job in your field by then, but the world won’t stop for you.
3. Think About What you Need Versus What you Want
Your needs include:
• And hot water
Premium cable, super fast Internet, the latest smartphone? Those are all wants, not needs, and you can’t necessarily afford them right away.
4. Save for Retirement (Even If You Don’t Have a Job)
What money you bring in is important; you need to start spending and investing it wisely right away.
While a savings account is a great idea, you should also start thinking about an IRA.
These days, it’s up to the individual to put money toward retirement and it’s never too early to start. Even if you can only afford to put back $50 every two weeks, you should start saving as soon as possible.
5. Put Down That Credit Card
If you’re tempted to better your lifestyle by using a credit card, resist that temptation.
You’re in the real world now. Don’t start your life as a grown up by getting yourself into debt. Credit cards are money pits. If you want something that costs too much for you to afford without a credit card, then you don’t need it anyway.
The real world is scary, but it’s also exciting, exhilarating, and challenging—especially when you start out with smart habits.
How are you preparing for life after college?