There are millions of recent college grads that are about to enter the workforce, and even though most of these young adults are enjoying real independence and will start experiencing the “day in and day out” of real life some of these recent grads are not prepared to handle the financial responsibilities that come along with that freedom and that new job.
Unfortunately many credit card companies target young adults in college because they know that most will be gainfully employed by the time they graduate, compound that with the fact that most college graduates are carrying a certain amount of credit card debt, so they’re already starting out faced with a significant hurdle.
According to experts 60% of recent graduates owes money after graduation for student loans, with an average of $20,000. $20,000 is a significant dollar amount due to the fact that the average media starting salary is around the range of $25,000.
The great thing about where a recent college graduate is at their life is that they don’t have a lot of overhead. They’re young, probably not married, and most likely don’t have children so college grads are at unique points in their lives where they have the opportunity to live very lean, and establish a budget to pay off debt.
Here are some great tips that should start recent grads out on a good foot:
Keep track of every dollar. Establishing a budget is the most important thing you can do after your graduate college. Tracking your expenses is very important so you can get a firm grasp of how and where your money is going.
Save now. The best time to start saving is always now, even if it’s a small dollar amount it’s imperative that you have some sort of savings set aside. If you begin to start saving right out of the gate you should have a significant savings account when you’re ready to retire.
Pay off your credit cards ASAP. This may seem like a no-brainer but to a lot of college graduates it’s not obvious to them, and they continue to use their credit cards to make purchases that they can’t afford. If you don’t have the cash to pay for a purchase, simply, don’t buy it.
Set up bill pay. When you’re first out in the “real world” you realize that it’s a little different than living in a dorm and you may be unfamiliar with the volume of different bills that you’re going to be inundated with. The best thing to do is set up bill pay with your bank to pay your bills, utilities, cable, credit cards etc,. should be all set up for payment on a schedule that way you won’t be late.
Learn everything on improving your credit score. Your credit score will save you thousands over the course of your life. A solid credit score will get you a better interest rate for a car, home or credit card and the thousands that it will save you over the course of your life is going to help you out in the long run.
Staying on top of your credit score and learning everything you can in order to make sure that you can get the best credit rating available is should be a priority in a young, college grads life.
Everybody is entitled a free credit report once a year, so become familiar with your credit scores and try to obtain a credit report from the three credit agencies Experian, Transunion and Equifax.
Learn to spread out your purchases. It may seem, once you graduate, and you move into that first apartment, or get that first roommate that there are so many things that you may “need”. Part of maturing as a young adult is separating your “needs” from your “wants,” and try your hardest to spread out your purchases so you don’t buy everything at once.
If you are a parent, start financial literacy early. If you’re a parent of a college student, or even a teenager it’s never too early to start educating your son or daughter on personal finance matters. Try to teach your son or daughter about setting up a budget and the dangers of credit cards.