Here is a bit of a departure from our usual articles about coupons…
Graduating college can be both exciting and nerve wrecking. Graduates will leave college behind and start a new journey in life. While it can be exciting to start your career and join the workforce, it can be difficult to begin your financial journey. A new job and new career can mean starting at entry level positions, which doesn’t always bode well for one’s wallet.
While it can be easy to mismanage your money after college, it isn’t a guarantee. With the right resources, budgeting can be a lot easier than you initially thought.
Start Your Budget
The first step to understanding how to handle your money is to determine where you are spending it. Unless you have a form of accountability, it can be easy to overspend. With a budget in place, becoming financially responsible can quickly become a lot easier than it would be without a budget in place.
Starting your budget begins with establishing your income, as well as your expenses. Once you have secured employment, creating your budget becomes a lot easier.
Begin separating your expenses into two different categories:
- Fixed Expenses: These expenses will not change throughout the month, such as your car payments, utilities, or mortgage payment.
- Variable Expenses: These expenses will change throughout the month. These expenditures can include transportation costs, entertainment, and food expenses.
Once these expenses have been established, take a bank statement and a credit card statement from the last month and separate the expenses into the appropriate category. This is where you can start diagnosing any future or past problems. Ask yourself, “Are you spending too much on takeout?” “Where can I improve my budget?” These are important questions to think about when you are creating your new budget.
Understand Your New Expenses
One of the biggest budget shocks is understanding additional expenses that come with being on your own. Campus housing will no longer be available, and a new expense you’ll have to worry about is housing. With so many new expenses being introduced to you after graduation, it is important to begin incorporating them into your budget as soon as possible.
Budgeting for food, housing, and other new expenses can throw you off your game if you aren’t aware. These expenses can be budgeted for through careful preparation and planning.
Get Started on Your Loans
While it can seem stressful to add another loan onto your precarious budget, getting started on repaying your student loans is important. You may have other loan payments, such as a title loan or medical debt to stay on top of. What those loans can teach you is that the interest rates can accumulate quickly, so putting off repayment is not recommended. While it may be tempting to only make the minimum payments, this can be the least beneficial option for your future finances.
Establish Your Emergency Fund
Entering the adult world means implementing adult financial behaviors into your life. Having an emergency fund for life’s unexpected expenses can be helpful for any recent college graduate. A car may break down, or a medical bill might come up. Regardless of the reason, it’s good to know that you are protected financially!
Lastly, don’t forget to use coupons!
Photo credit, airpix, via Flickr.