Financial Tips for New College Grads
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This is the first part of the series “The Ultimate Guide to Personal Finance – The Blog Series”. In my effort to help readers know more about personal finance, I’ve decided to start this series to help people make sense of personal finance and be wiser about money. I suggest that you do subscribe to my RSS feed to get newer updates on this series.
In this Blog Post:
• The financial challenges of living on your own
• Being on your own versus living with Mom and Dad
• Striking a balance between lifestyle and finances
• The low salary and high debt pitfalls
• Your financial situation will improve, really
I will start this series with newly college graduates in mind. I believe they are the highly vulnerable to financial difficulties and they are the ones that badly need some finance advice as they start things of from “scratch”. However, as we continue, this blog will start to “branch-out” to others as well, be it in your 30’s or older.
You probably have a good understanding of why learning about personal finances is important (the fact that you’re reading this now and how the way you handle your personal finances has a major effect on the way you live. Personal finance will become increasingly important to you as you get established on your own. You’ll probably have more money during the next few years than you did in high school or college, and you’ll need to know the best way to handle it.
Along with more money, you’ll have additional responsibilities. You might already have college loans to repay, or maybe you’re still paying for a master’s or doctorate program. In addition, you’ve got to pay for a place to live, transportation, food, clothes-the list goes on and on.
Living on your own can be great, but nobody said it would be a walk through the financial park. There will be, shall we say, challenges. That’s why you need a thorough understanding of what your personal finances entail and how to manage them to your best advantage.
Hey! Nobody Told Me It Was Gonna Be Like This!
Remember when you were in school? Sure, there was a lot to do, but looking back, it probably seems that life was a breeze. Tests and term papers pale in comparison with that important project due Friday at work, the one that your boss can’t wait to see. Getting to the cafeteria before it closed seemed like a big deal sometimes during college, but compared with shopping, cooking, and cleaning up afterwards, it was nothing. Remember when you thought buying those textbooks every semester was a hassle? It wasn’t so bad when you compare it with all the stuff you have to buy now, huh?
It’s easy to get overwhelmed as your responsibilities mount, but try to relax and enjoy yourself. Getting started careerwise, socially, and financially might be unsettling, but once you’ve lived on your own for a while you’ll become savvy and streetwise-and do just fine.
The next time you get discouraged because work isn’t going as well as you’d hoped, or you don’t have the right apartment, the right girlfriend, or enough money, think back to your first day of college. Remember how you felt when your parents dropped you off, leaving you on your own? First-time college students describe that feeling as lonely, sad, or even desolate. But soon had made friends, gotten used to the class schedules and were having a great time. Although starting a help. career and a life on your own is more demanding than college, it too will become easier as you get used to it.
Mom and Dad, Where Are You?
Finishing college is a milestone. The cap, the gown, flowers, gifts, hugs, and handshakes are all symbols of the ending to an important part of your life and the start of something even more challenging and exciting. For many new graduates, figuring out what to do after college is the biggest initial challenge. Our society has this expectation that when somebody graduates from college, she’ll find a job, move out on her own, and begin advancing her career. But it doesn’t always work like that.
Studies show that most college graduates do not make a seamless transition from student to employed person living on their own. If their degree is not in a field where employment is readily available, it can take a while to find a job. If there’s no job, there’s no money. Having no money delays the process of getting out into the world on your own.
As a result, more young people are moving home with Mom and Dad after graduating from college or having been away for another reason. It’s estimated that nearly one third of those who had moved out to go to college or for other reasons come home within five years. Some others don’t move out at all, but live at home while attending college or working. Even many graduates who find jobs right after college aren’t in a hurry to get out and live on their own, preferring the security and ease of living at home.
U.S. Census figures show that in 1994, 65 million people between the ages of 18 and 34 were living at home with a parent or parents. There’s a name for this group: ILYA (incompletely launched young adults). The great majority of these people have never been married, and more men than women stay home with Mom and Dad.
Not having to pay rent, or paying just minimal rent to parents, gives recent grads a lot more money to save-or to spend. Many of these stay-at-home grads are the ones with the fancy electronic equipment or sport utility vehicles. Others, though, use the money they save on living expenses to pay back college loans or to put into a fund for a down payment on a house.
If you have a job, but are living rent-free, or nearly rent free, at your parent’s house, realize that you’re in a great position to save money. We’ll get into saving and spending in more detail later of this series, but realize that if you are living in this situation, you may never have another such opportunity to save.
Still, if one-third of all 20-somethings are living at home, that means that two-thirds are not. They’re busy getting started on their own.
Next–> Being on your own versus living with Mom and Dad
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4 Responses to “Financial Tips for New College Grads”
That transition from college to real world is a tough one. My step daughter is doing well, but she is struggling with the lack of values in the world, versus at her small school campus, where they were sheltered from much.
I myself went to school at a state university and worked my way through, managing to graduate without any loans. So graduating was actually better for me! stumbles
By
Lisa Spinelli (Who am I?) on Jul 30, 2008