You’ve done it! You’ve graduated! Now that your textbooks are sold and you are starting out your career, it’s time to take a look at your financial situation. Now is the time to take control of your finances.
Pay off your student loans
The average college student graduates with over $37,000 in student debt. That can seem incredibly daunting as you are just starting your career; however, when you break it down into a reasonable payment plan for your finances, you can chip away at that debt over time. By breaking your student debt into bite-sized pieces every month, you can pay it off within a reasonable amount of time.
The key is consistency and to never skip a payment. Kathryn Casna, a financial expert from TermLife2Go.com, provides three ways to make paying off your debt a priority:
- Avoid missing payments by setting up autopay through your bank.
- Eliminate debts faster by paying more than the minimum.
- Make loan payments non-negotiable: cover them before budgeting for anything else.
No one wants to have their student loans follow them around their entire life. You can avoid that by creating a payment plan that will get you out of debt and moving forward.
Create a budget
If you don’t watch where your money goes, you will be stuck always wondering where your money went. After living life on ramen, you may feel like you can forget your college budget when you get your first paycheck. However, if you want to be living the high life in the future, you need to be disciplined now. Creating and sticking to a budget will help you keep those unnecessary purchases in check while helping you to pay for what’s important.
Todd Christensen, an education manager at Moneyfit.org, breaks down his recommended budget:
- 10% Give: Donations, taxes, and acts of kindness
- 50% Live: Rent or mortgage, utilities, transportation, cellphone, internet, groceries, and clothing
- 10% Prepare: Emergency fund, care repair or replacement, travel, gift giving, furniture and appliances, and other short-term goals
- 10% Plan: Retirement, down payment on a home and other long-term goals
- 10% Improve: Increase your income-earning potential through education (or paying off student loans), training, or starting a business
- 10% Enjoy: Have fun without the guilt of breaking your budget
You’ve worked hard to earn your paycheck. Now let that money work for you. Investing is a way that you can literally make money in your sleep. By investing as often as you can, you can see your money increase without having to do anything.
While you may think that investing is something that old, rich people do, you have the greatest advantage if you start investing now. Why? Because time is on your side. The longer you can let your investments grow, the larger your return will be.
Robert Farrington, a financial expert at The College Investor said:
“If you get started investing at 18 years old, you only need to invest about $2,100 per year to be a millionaire by age 62. That number starts to go up a lot the older you get. If you wait until 30, that number becomes $6,900 per year you need to invest – over 3x the amount per year. All because of time.”
College finances are no joke and they are not always easy to figure out. With these tips from GradGuard, you are sure to get ahead of the game!