Handling finances is a tough ordeal for a lot of people especially for those that are just about to enter the professional world right after college. According to NACEWEB.org, there were about 1.8 million bachelor’s degree graduates for 2015. These graduate are just part of the total students who just left higher education and about to enter the real world.
There are a lot of ways to jumpstart your finances but that is a little easier when you already have experience behind you. These are usually those people who are coming out of debt or even those that filed for bankruptcy. But for those that just graduated and did not really think much about finances as much as their grades, financial management can be downright scary.
When you were still in school, the most that you might have thought about finances would be the amount you need to cover your cost of attendance. You might have also thought about finances when you walked into the canteen or needed to buy something for school. But oftentimes your main concern was getting those high grades to increase your chances of landing a high paying job after school.
But you need to remember that as soon as you step out of your school’s gates, your top priority is to look for a job to be able to move forward with your life. That means money to pay for the house whether you are renting or paying down a mortgage, paying for the car or having money for public transportation
Bringing your learnings in college to your finances
But you need not worry because although you are a newbie in handling your finances, there are college lessons that would help you through your finances. You might not know it but you are not going in blind.
- You will need to learn as you go. As you went through college, you had to learn a lot of things as you go. You had to hit the ground running with your lessons and even how you can get extra income while studying. As you now decided what items to pay a full price on or what to put in installment, you will not be in unfamiliar territory as you also had to endure the same thing in college. Just remember to try and know as much as you can as you go along just like your exams week to be able to make informed decisions.
- Your mistakes will affect you in the long run. Remember when you chose to drink all night instead of opening your books for the exams the following day? Or when you chose to skip class to catch that concert with your friends? Those decisions affected your grades which will haunt you until after you graduate. You need to remember those situations when you chose to do the wrong thing because doing the same with your finances can also affect you in the long run. Just like choosing to pay less than what is in your credit card statement would increase the succeeding payments and drop your credit score as well.
- Do good and you feel the effects in the future. Hard work pays off so you need to remember how you felt when you chose to study instead of party and aced that exam. It reflects how well you value your education and potential employers will most likely favor those characteristics. The same with how well you manage your payments because lenders will be more flexible and might even be able to give you a lower rate.
How to get out of debt
After you graduate from college, you will soon find out how debt has been so much a part of consumer’s household budget. But though it occurs in your finances, it does not mean that they have to stay there for good. Here are a few tips to be able to get out of debt.
- Audit all your debt accounts in your budget. Investopedia.com explains that your budget is simply how you lay out your estimated expenses and revenue over a period of time usually every month. You write down how much you earn every month as well as your expenses and see where you can make improvements. Look at all your expenses and check if you can lower some of them to be able to make bigger debt payments.
- See how much you can increase your income. One of the surest ways to deal with financial problems is to increase your income to cover more debt payments. Of course, this is easier said than done because you would either have to look for a way to get a raise at work or look for a second job. You can even start a side hustle based on your hobby or even start a whole new business that you can run on weekends.
- Consolidate and transfer balances to lower interest rate. Debt consolidation loans exist to help people make debt payments a little easier. It combines all the loans under one account to help with payment management. You can also look at transferring high-interest card balances to zero percent cards or anything lower than the existing. This helps you either manage the payments better or save some money when you get to transfer to a lower rate.
- Keep your expenses down as you increase payments. If you are able to increase your income, try lowering down your expenses a little more not just for the time being but adopt a frugal way of living. This can help you lower down your expenses for life.
Important financial tips after college
Once you set foot out the gates of your school, you would need a lot of tips in handling finances. Here are some of them that you can use right out the bat.
- Get the clear picture of your student loans. This is the first order of business as soon as you finish college. When you had to depend on student loans to cover your cost of attendance then you would be stuck with several school loans. Make sure that you get your repayment in order to get a good start with your finances.
- Aggressively look for a source of income. Your next order of business should be getting a job. CNBC.com explains that employers are hiring 9.6% more graduates than that of last year. But a higher percentage does not mean assurance of work. You still need to exert a lot of effort in getting that dream job.
- Get your credit score up. Make on-time payments with your financial obligations and your credit score will go up. As soon as you see your score up, you will get to enjoy multiple credit benefits like possible pre-approval and even low-interest rates.
- Consider starting early with investments. As soon as you can, build up your reserve funds and even start putting money into your retirement. One thing you have going for you is your age so use compound interest to your benefit.
Handling finances right after college can be quite scary but you need to know that there are lessons you have learned in school that you can apply with your finances. You just need to look into some learnings and process the lessons you have learned and apply them in your money management.