After you have graduated from college, the least thing on your mind right now could be looking for financial management tips. Besides, there seem to be more important things on the table for you. You just graduated from years of homework and exams and you are eager to take on the real world.
You might even have some spring in your steps because, in a way, some college experiences can prepare you for handling finances. Add that to all those financial pieces of advice you have been getting from your parents and you are raring to go! However, at this point, there seems to be an ominous dark cloud ahead you can’t seem to shake.
There is a good chance that this would have a lot to do with your student loans. If you are one of those people who were blessed enough to get through college debt-free, then good for you. Thank you, parents, if you used a college fund they saved up to pay for your education. You could have also made laudable decisions such as taking advantage of grants, spending a few years in a community college and even holding down jobs to pay for you cost of attendance.
According to an article by Raw Story, 2016 college graduates had an average student loan debt of about $37,000. Once you start living in the real world, this would just be one of the many things you have to work with. That being said, financial management tips becomes a lot more important especially after graduating from college. Here are a few things to consider as you try to take on your own money management challenges ahead.
Get a job
One of the first financial management tips you need to focus on right after college is getting a job. This will serve as the foundation and the starting point for all your financial decisions in life. Internships can be a great jump off point and can land you your dream job. At the very least, you have one foot in the door.
As you try to look for work, it might delight you to know that the National Association of Colleges and Employers recently shared that employers are taking in 5.8% more new graduates this year compared to last year. That is a big help but you still need to put in time and effort in looking for a job you love.
There is a debate on whether you should settle for a job you need or pursue a career you are really interested in. Some suggest to take in first what you need and slowly transition to a job that you love. For some, they prefer to chase their preferred job at the onset. Whatever you choose, the important thing is to land a job to put in a regular income through to your budget.
Tackle your student loans is one of the financial management tips for college graduates
As mentioned earlier, student loans seem to be the bane for most college graduates. However, there are also studies that reveal that student loans are actually worth it. This is because some studies have shown that getting a college degree puts you in a better position to get higher paying jobs. It also puts you on track to a better earning potential over the course of your professional career.
That is all good but it does not mean that you can neglect your student loan repayments. Even if you have accumulated insane amounts of student loans, there are a few ways you can address your payments. For one, you can consolidate your student loans to make it easier to manage and even get the chance to lower down your payments. There are other repayment programs for student loans that can fit your budget as they take into consideration your income in determining the monthly payment amount. The bottomline is to be diligent in paying back your student loans to get it out of the way as soon as possible.
Do not overlook retirement planning
The fact that you are still young does not exempt you from retirement planning. This is one of the financial management tips that you need to seriously consider because time is on your side. In fact, time is one of your best resources at the moment. The sooner you start to save up, the more you would have at the time you need it.
You can take advantage of a matching 401(k) in your place of work. This is synonymous to free money on the table. As you max out your annual contributions, the company can put in matching amounts to a certain degree. This increases your 401(k) amount you can use in retirement. You can even look into other investment options such as stocks which are a long-term investment. This suits you best since you have time on your hands to weather out economic movements on your investment.
Slowly build up your reserve funds
One thing you have to remember is that financial challenges will always be a part of life and that they will show up at a time when you least expect it to. It is for this reason that you need to build up your reserve funds to give you that much-needed cushion when they strike. You can start with a small amount and slowly build it up. The goal is to have a few month’s equivalent of your expenses saved up in case your income stops coming in. That way, you do not descend to unmanageable debt just to keep afloat.
Set your long-term goals
One of the financial management tips you can use early on is to pin down your long-term goals early on. This way, you get to have direction with the way you put your household budget together. It can be buying and paying off a house at a certain age or even setting up your own business. You can pattern your budget as well as other financial decisions to bring you closer to those goals.
Manage your credit card use
The temptation to start charging on your credit card becomes bigger with the lure of a steady income. You become a lot more confident to charge expenses on your card. There is nothing wrong with this and in fact, being able to responsibly use your credit card can help you improve your credit score.
When talking about credit card use, one of the best financial management tips you would ever get is to pay the full amount every time. This helps you with your credit score as well as making sure you do not have to pay more than what you charged. This is because as soon as you start missing payments, succeeding amounts would hike up with numerous fees, penalties, and charges.
Do not stop learning
You are out of school but that does not mean that you should stop learning. If you are worried about making investments because you too little about it then learn it. Retirement planning can be intimidating because of multiple things to consider. This should not stop you in trying to find out more about it.
If you are in serious debt already with student loans and even credit card debt, you can look for debt relief companies that can help you learn along the way while helping you tackle your repayment options. There are a lot out there and you just have to find the best one for you.
There are a number of financial management tips you can use to help start you off on the right track after college. These can be a great guide providing you a blueprint for financial success.