I was lucky enough to have the financial support of my parents throughout college, and though that helped big time, I still struggled with money after graduation. And if I had a hard time, then I’m sure those supporting themselves during college have it even tougher (p.s. respect!). Looking back, there are so many things I wish I would have known, or did know and wish I had done. From being smarter about credit cards to making extra cash, here are general tips on being smart with finances after graduation. I hope they help!
For most of us, this is brutally boring information, but it’s something you’ll need to know throughout adulthood—no matter what. Whether it’s recruiting your parents or the cute money-savvy boy next door, listening to seminars, or finding your own financial advisor (maybe you and a friend can split the bill?)—educate yourself. The more you understand about debt-to-income ratio and your credit score, the better, and the more painless the rest of your financial journey will be. I promise!
Avoid (more) credit card debt
It’s crucial that you take steps forward not backwards in being financially successful once you graduate. This means your credit cards should be used sparingly unless your post-grad income allows you to pay off your balance in full every month. (Something I learned the hard way—don’t spend what you don’t have, it’s as simple as that!) If you have debt that you racked up in college, don’t freak out, a lot of people do, but there are resources to help you knock it out ASAP. I’ve heard Dave Ramsey’s Total Money Makeover is a little cray, but that his plan is effective. I also really like Nicole Lapin’s Rich Bitch for money advice throughout your twenties.
Find affordable fun
This goes for any stage in life, but especially when funds are tight being a newly-grad, think outside the box in terms of how you spend your time. It’s likely that your budget for entertainment is small, so do things like beach bonfires and picnics with friends instead of going to a restaurant on autopilot. Or join a cheap sports league instead of an expensive gym. Volunteer at a dog shelter to pass weekend mornings and to feel good about yourself. Settle for packed-car road trips vs. flights across the state. Have fun, but for cheap (or free)!
Pick up a side hustle
Even though it doesn’t feel like it, this is usually the time in life when jobs aren’t too demanding, and you tend to have more free time and less responsibilities. Think about what you like to do or any hobbies you have, and try to pick up a side gig based on that. Maybe it’s selling your artwork, bartending (because you’d be at the bar anyways), copy editing online, or working at a coffee shop because you’re an early riser. Picking up a side job could provide some much-needed financial leeway, especially if you’re paying off debt. Even if it’s only a hundred bucks a month—it adds up.
In college and shortly after, I told myself that it was OK to make irresponsible financial choices because “I’m young” or “YOLO”, but what I’ve learned since then is, at some point, you have to stop telling yourself that. If you don’t, you’ll be in more debt in five years than when you graduated college. It’s a hard pill to swallow, but it’s part of becoming a real adult in the real world. Create a budget on mint.com or a similar service, and stick to it (no matter how great the shoes are). You’ve got this!
Ask for support
Staying on track with your money is like staying on track with a diet. You wouldn’t want your girlfriends to take you out for tacos every night when you’re trying to drop a few lbs, just like you wouldn’t want friends encouraging a shopping trip vs. saving. Let your circle know you’re situation and that you’re trying to be smart with spending. Everyone has their own path and different things work for different people, but if your goal is to truly build wealth and put yourself in a positive financial situation, surrounding yourself with people who respect that and can provide support when you’re about to crack is key.
How have you handled finances after graduation?
What tips do you have for being smart with money at this stage?