Are you graduating from college? This is a monumental achievement for young adults. This marks the beginning of the “real world” however this achievement does come with new financial responsibilities for the young adults.
Making the right decision concerning money after you have graduated means the difference between being financially independent and being bankrupt. This means that mom and dad will no longer give you financial support, it is time to learn how to fend for yourself because you are now an adult who can work and earn!
This can be a frightening thought after you are not in school how to pay your bills, get out of debt, manage your finances among others and here you are released to face the “real world”
After graduating from college you should make smart moves concerning your finances. The four tips will help you how to manage your finances better.
1. Start budgeting
Having money is one thing but knowing how not to waste it is another thing altogether. You must have a financial plan in place that will guide you on how to spend. The first thing you need to know is how much your have coming in as income and how much you are spending.
The earlier you start to budget and plan for your money the better. When you are working with a budget, you will learn how to prioritize what to spend immediately on and can wait. Writing down your needs list and your want list will clearly guide you on how spend wisely.
Spending on your needs list is far more important than spending on your want list. You prepare spreadsheets on your computer with the details of you budget and plan your finances based on this information. There are several on-line budget planners that are free which you can use to manage your finances
2. Try and understand your credit report
It is important for you to get familiar with your credit report. A credit report will either open doors for you or close them. When you apply for a job or you want to rent an apartment, buy a car among things your credit report will have a bearing on what the outcome is.
Once your credit report has information about your failure to pay back a loan or a credit card debt then you are least likely to be considered for a job opportunity or being able to rent an apartment. Having a poor credit background means that you will have to pay high interest rates.
According to the Salli Mae survey, 84% of college graduates possess a credit card. According to FinAid.org 2/3 of 4 year undergraduate students graduate with a debt. Start now to learn more about your credit report and all about a credit score.
Knowing how the credit report and credit score affect you in future will help you to understand the importance of paying your bills on time.
3. Get yourself health insurance
After graduating from college you are equipped with knowledge, academic qualifications, but you can also lose a few things such as your health insurance. According to the new health care reform law in the US, you are allowed to use your parent’s health care plan until you reach the age of 26 years. This can cover all medical expenses in the meantime while you arrange to get your own health insurance when you reach the age of 26 years.
4. Be debt free
Debt can cripple you financially, making you fail to be able to enjoy a comfortable life as a young adult fresh from college. It is not good to accumulate debt. This will only will make you end up in a big financial mess which may take you some time to sort out.
Sometimes it can be inevitable to avoid borrowing money while still at college, but sometimes it can be due to your extravagant lifestyle or irresponsible borrowing of money.
According to The Economic of Young America Study, “An average college graduate nearly has a $ 20,000 while still in college”.
This means that it might take you close to 18 years to pay off this debt. If you have a debt, try and pay it off quickly so that you live a debt free life, this may call for stern financial discipline on your part.
Putting every penny you get towards the debt will help you to rid yourself of the debt. This will demand from you to live frugal a lifestyle for sometime until your become debt free.