Choose Your Job Carefully – If you’ve chosen your career, remember that a lower-paying job in your field is likely to be a better deal in the long run than a higher-paying job in a field you have no long-term interest in. Accepting a job in an unrelated field, simply because it pays more, either delays your career progress, or traps you in a field of work that may not make you happy.
Pick up a Book on Money Basics – There are many excellent books written on financial advice. A couple that are highly recommended for young adults are:
- Generation Earn: The Young Professional’s Guide to Spending, Investing and Giving Back, by U.S. News & World Report senior editor Kimberly Palmer
- Get a Financial Life: Personal Finance In Your 20s and 30s by Beth Kobliner, a noted personal finance commentator and journalist for Money Magazine.
Make a Budget – Creating and living on a budget is an important step in controlling your finances as well as learning to spend less than you earn. You can spend money on things like recreation and socializing, but you have to live within your means and place limits on the amount you spend in those categories. Check out these links to some personal budget worksheets you can use to get your budget started.
Don’t Move In With Your Parents – Sorry mom and dad, but it’s difficult to move back home when you’ve been independent. You’ll grow faster and learn more by being on your own, even though it may be a struggle at first. Many college graduates return to their parents’ home to save money, but most of them lack the discipline to save, and end up blowing their earnings on cars, entertainment, electronic gadgets, and their social life. An alternative could be to move in with another college graduate. Sharing the expenses of owning a home or renting an apartment is a great way to save plenty of money, and you can stay with someone who is on the same walk of life as you are.
Wait on the New Car – For a lot of graduates, a new car is one of the first things they want to buy when they graduate, especially if your car is redefining the name “clunker” while still in school. If you have a drivable car, waiting as long as possible is a smart money move, as well as buying a used car instead of a new one.
Reduce Your Debt Load as Quickly as Possible – Fun fact: The average college grad is nearly $20,000 in debt after graduation. This means if you paid $200 a month to pay back that debt it would take you nearly 18 years to do so. Assuming you take on no other debt that means you’ll be close to 40 years old when you finally become debt-free. Make it your mission to pay it off by living frugally and dedicating a section of your budget towards paying it back. Paying off your debt may take time, but once you’re debt-free you’ll be proud of your diligence in getting it taken care of.
Don’t forget that this is your time to focus on yourself and live courageously. Take advantage of a cousin’s wedding in Denmark or learn how to Scuba dive. Life is full of wonderful opportunities, don’t let taking care of your future take away from living in your present!