Throughout the month, graduates nationwide will celebrate the culmination of their college career with friends and family. It's a time both for reflection and forward-thinking. 'What's next?' is a common (and let's face it, annoying) question graduates will hear over the next several weeks. One thing that may be on the minds of graduates - you know, on top of the job search, the move from campus and the fundamental lifestyle change that comes with graduating college - are finances.
Student loans, rent, everyday living - it's an awfully lot to consider for newly-anointed graduates. (Time to celebrate, right?) So what are some actions graduates can take to get their personal finances in order both in the long-term and short. As always, we're here to help...
1.) Apply for a new card
Especially if you have an existing credit card balance, now is a good time to apply for a new card - ideally a credit card with zero interest applied to balance transfers.
Since most college students are 21 and over, odds are new graduates are now eligible to apply for new consumer credit card offers on their own, without a co-signer. So graduates paying interest on an existing balance would be wise to apply for a new balance transfer credit card, transfer their debt and start paying down that old college debt interest-free for anywhere from 6-to-18 months. Once you've got your new card...
2.) Make paying down debt a priority
In the long run, eliminating credit card debt with one or multiple on-time payments each month is an easy way for college graduates to help themselves out. Interest rates and loan approval rates probably aren't on the radar of the average college grad right now, but over time the decisions we make in our early 20's - when we're probably the least informed about personal finance - can have a real effect on our long-term financial goals.
Keep "bad debts" like your credit card balance low and be sure to pay your bill on time each and every month. You'll be happy you did so months and years from now when you're applying for loans, be it auto, home or otherwise.
3.) Start saving
Let's face it, most college students graduate pretty darn broke. (I know I did.) And yet, many of us are ready to take off immediately - be it on a trip to Europe or a summer across the country. (Again, I know I was.) So how do you step out and make it on your own without much cash on hand?
The short answer is to set some goals, and start saving.
For example, when I graduated college I stuck with the part-time job I already had working at a restaurant and made it full-time. I gave myself a little over a year (max) to live in my hometown (which is where I also went to college) before I took off to find a job I could use my degree with. That goal set the tone for a year of pretty modest living (though I refused to move back in with my folks, I did welcome many a free dinner), and 13 months after graduation I set off on a cross country journey that led me to where I am today.
How did I do it? Well, it really came down to taking as much work as I could (I freelanced in my spare time to build my resume and earn some quick cash), and I rarely turned down a shift. It also meant cutting down on buying really nice things (I was just going to sell them when I moved, anyway), and honestly it didn't hurt that my girlfriend and I both worked in the food industry (free food!).
In the end, I really just needed to move on from my college and hometown and make it on my own, and was willing to do just about anything to make it happen. It's the same motivation and discipline that gets students through exams; work now, play later.
Graduates, I'm four years removed from earning my degree and I can say that that year of frugality really defined my spending habits today while giving me the freedom to start what essentially became my career. Sacrifice and save now, and take advantage of the fruits of your labor later.
