7 Keys to Managing Your Money After Graduation
Congratulations, you’ve finally graduated! You’re officially an adult with the rights and privileges that brings, right? Well, before you “let the good times roll”, make sure you’re aware of the challenges and perils that can bring. It means that it’s time to start thinking about how to manage your finances. Unfortunately, many college graduates leave school without a clue about how to handle their money. If you’re one of these graduates, don’t worry – as we said, you’re not alone! If you want to avoid making the same mistakes so many others will make as their own “adulting” begins, read on for some tips on managing your finances successfully after college, which will make life far better for you now and in the future:
1. Create a budget:
This is the first step in managing your finances effectively. A budget will help you be clearly aware of your spending and make sure you’re staying within your income constraints. There are many different ways to create a budget, so find one that works best for you.
2. Stay disciplined with your spending:
It can be tempting to overspend when you have money coming in regularly for the first time, but it’s important to remain disciplined if you want to stay on track financially. Try to avoid unnecessary expenses and stick to your budget as closely as possible.
3. Make Saving a Habit:
One of the most important things you can do for your financial future is start saving money early. Start by setting aside at least a small amount of money each month and gradually increase the amount as you get used to it. You may also want to consider opening a separate savings account so that your money can grow “out of sight” over time, and hopefully avoid the temptation to put your hands on it!
4. Avoid Debt:
Debt can be very costly and often takes years to pay off, so try to avoid it whenever possible. If you do need to borrow money, try to get a loan with low interest rates or if absolutely necessary, only use a credit card that offers a low interest rate. Whatever you do, don’t fall into the trap of using credit cards for everyday purchases unless you are positive you can payoff the full balance every month.
5. Invest in yourself:
One of the best things you can do for your financial future is invest in yourself. This means taking courses and learning about personal finance topics such as investing, saving, and debt reduction. This could be as simple as following a social media account that explains personal finance in a way that sticks with you. The more knowledge you have about money matters, the better equipped you will be to make sound financial decisions moving forward.
6. Keep a separate emergency fund:
This is an important part of any financial plan. However, many people don’t understand the significance of an emergency fund until they need it. An emergency fund is a savings account that is specifically designed to cover unexpected expenses. This can include things like medical bills, car repairs, or home repairs. By having an emergency fund, you are prepared for the unexpected and you don’t have to rely on credit cards or loans to cover unexpected expenses. Everyone should have an emergency fund because there are no guarantees in life. You never know when you might experience a financial crisis that requires immediate attention. By having an emergency fund, you are prepared for the unexpected and you don’t have to worry about falling into debt if something goes wrong.
7. Get creative:
If you find it hard to make ends meet consistently and save successfully, one of the best ways to learn how to live on less is by getting creative. Think about ways you can reduce your costs without making too many sacrifices. For example, could you swap cable for Netflix? Or could you carpool with friends instead of taking the bus? Could you share expenses with a roommate for a year or two? The possibilities are endless, so get creative and see what works best for you!
