Good for you, you’ve graduated college! You have a diploma with your name on it and are now most likely being pushed into the deep end of the real world by your parents. Do not be alarmed! Pretty much every adult you know has been in your exact position and has survived.
First and foremost, see if you can have a graduation party and invite all of your parent’s friends. While you will have to sit through hours of talking to old people about your future and your past, you will receive a large incentive: money. People love to give money to new grads, especially if they feel like it will go towards something positive in your future. So, suck it up, talk yourself up, and put all of your graduation money in a bank account (and save it. Don’t spend it right away. Think of this as safety net money instead of money for your leisure. After all, you’re a graduate now!)
Pay Off Student Loans
As soon as humanly possible, solidify a payment plan for any and all student loans you may have. This is the one case in which you can you the money you saved up. The quicker you begin to pay these back, the better, as student loans can have very high interest rates. If you can get a job that allows you to start socking away a little bit of money to these loans every month, do it. Otherwise, see what you can do to have your interest rate frozen so it doesn’t start accumulating until after you have a job. Many loans offer a one year grace period or offer forms you can fill out to defer your payments without gaining interest.
Get A Job
After you have sufficiently partied and put all of your loans in order, securing and/ or starting a job is your next step to being financially stable (and maybe even financially independent!) One thing to remember in a job search is that you will most likely not get your dream job right out of college. You may have to work to climb up a ladder to obtain your fancy dream job, which could take years and quite a few less desirable jobs in between. You are young, healthy, and have very little else going on in your life aside from building your career and preparing for your future. Take any and all jobs you have seriously and make them your number one priority. Work hard! Work long hours! Put in the effort and time now, when you don’t have a family and other such huge responsibilities to attend to. It will pay off so that hopefully by the time you do have serious responsibilities, you also have your cushy dream job that can work around the other things you hold dear to your heart: family, recreation, vacation, etc.
Create or purchase a budgeting spreadsheet and stick to it. You are an adult now, which means you need to start doing adult things like budgeting your money and planning your life in a logical way. Figure out your living situation and put aside rent money every month. Then, make sure all of your other bills are attended to. The easiest way to do this is to just have them sent from your bank account, which is a feature that you can very easily set up online. Then, figure out what you have left for expenses such as groceries, clothing, furniture, and other things if you have the cash to cover them. The point is to actually sit down and allot an amount of money to each category a month. Simply having a hard, tangible copy of a budget will make you much more likely to follow it and benefit from it.
No Credit Cards
Do not, under any circumstances, apply for or secure a credit card. Just don’t do it. It is way too easy to have your spending get out of control and end up in debt. Debt, which is very much like a dark hole of sadness and despair, is the last place you want to be. Stick to paying for things in cash or with a debit card. This will keep your spending on track when you combine it with a written budget. At this point in your life, you want to be establishing good credit, not destroying credit. If you create a budget and stick to it, your credit score will be fine. Don’t go and ruin it all with a single piece of plastic.
Even though you are young and have your entire life ahead of you and retirement is not even a word that is in your vocabulary yet, it is never too early to start saving for such things. Also, the earlier you save the better because interest will help you a lot in the long run. For example, if you start putting away money in a 401k when you are 20 and stop when you are thirty, you will have more money by the time you retire than if you start at thirty and put money away until you retire. Isn’t it crazy how much that interest adds up if started early? If a retirement plan is too big of a commitment for you, start a smaller investment, like a ‘rainy day’ fund. Having any amount of cushion will definitely come in handy.
Find a way to be insured. If you are under 26 and are still covered by your parents plan, stay on that as long as you can because it is probably better than what you could provide for yourself. After you are kicked off of that plan, try to already be in a job that gives you some coverage. This will be the easiest way for you to be insured. Make sure you insure other things in your life as well, like your apartment and your car, if you have one. While insurance is annoying to pay, you won’t be so annoyed when you actually need it and don’t have thousands of dollars of bills to pay off.
The soundest advice for a new college grad is to manage money wisely and stay out of debt. If you can do those two things using simple tactics, you will be a successful outlier in the financial realm of graduates.