Hey college grads - picture this: after receiving your diploma, you’ve landed a great job at a Fortune 500 company and you’ve got a killer apartment in Harbor East overlooking the water, on which you spend your weekends out on your new boat, where your new “bling” sparkles in the sunlight. Now take a safety pin and pop that ridiculous dream cloud. I could say I’m sorry for smashing (or popping) your dreams, but instead I’m going to say welcome to the real world!
You may have once been the big man on campus, but have you ever heard of the big-fish-little-pond effect? Welcome to the ocean. Now, if you are intelligent, motivated, and a hard worker, I’m sure you’ll go far in your chosen career…but no matter how intelligent, motivated, and hard-working you are, chances are you’ll be beginning your career in a tiny cubicle with a measly paycheck. Oh, and don’t forget about those lovely student loans that it’s time to start paying off.
In order to avoid that “I-think-I-should-be-able-to-live-like-a-rock-star-since-I’m-done-with-college-and-have-a-real-job-now” complex, take into consideration some of these tips for managing your money when you first enter the real world:
- Open a checking and savings account if you don’t already have them. Though you are no longer a student, many banks will still allow you to open a student/starter checking account, which generally offers some extra advantages over other basic checking accounts.
- Set a monthly and weekly budget. Figure out how much money you’ll need for bills each month, decide on a realistic amount of money you plan on saving, then take the rest and do the math (yup, still using math out of school) to figure out how to spread out your spending money evenly over the course of the month. Online personal finance management tools can be helpful with this.
- Make sacrifices. After you create your budget, chances are you’ll have less spending money than you would’ve hoped for, so you’re going to have to prioritize your wants. Do you have to have that Starbucks latte every morning? That’s fine, but you may have to cut out those Thursday evening Happy Hours.
- Pay all of your bills on time. You can do this easily using a bill pay service, which allows you to schedule payments ahead of time and set up recurring monthly payments. If you find that you are having trouble paying your bills on time, reconfigure your budget.
- Open a credit card account. Stick to one credit card at first, and don’t charge things to your card that you can’t actually afford.
- Take advantage of any benefits that your new job offers. Health insurance plans are generally much cheaper when you purchase them through your employer, and many companies offer 401(k) matching benefits. You need to start saving for retirement anyway (unless you plan on working forever), so you might as well let your employer help add to your fund.
The GOOD news is, at some point you’ll start making more money. When this happens, you can add a little more to your weekly budget, but seeing as you’ve been able to survive on your current budget, try to think about your long-term goals and add most of your extra cash to your savings.
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