I remember many years ago when I was in college dreaming of the day I would graduate and make beaucoup bucks. Well, I graduated college but am still waiting on the beaucoup bucks! I am sure this is the case with most college graduates. Finding a lucrative paying job post graduation is getting more and more difficult with the countries economic situation. On top of that, with college graduation comes financial responsibility. One of the most daunting things to hit college graduates is the repayment of the student loan debt.
Preparing Your Own Financial Plan
If you are getting ready to hear Pomp and Circumstance, then you will want to start preparing your own financial plan. Getting started on the right foot financially is one of the most important things you can do upon graduation. Here are some tips to help you get started off:
Budget: Upon graduation will come life stages: first job, first paycheck, first budget. The most important thing you can do is create a budget. There are a lot of free budgeting services you can use, or you can just use a spreadsheet to create your budget. You will need to mark down all of your expenses, be sure to include food, rent, utilities, student loan, and any other expenses you have. Then you will want to mark down all your sources of income. You will want to create a budget every month, but take into account any additional expenses that may be coming up like birthday presents, vacation, etc. This will also help you identify areas where you might be overspending.
Insurance: You were most likely covered under your school’s insurance. However now that you are venturing out on your own, you will need to secure your own coverage. The provision of insurance is one of the greatest benefits of being employed. However, if you do not have a job upon graduation you will want to start looking at policies – at least those for major medical. No one ever thinks anything is going to happen, but you just really never know what may come up. If something major comes up without insurance in place, the results could be devastating financially.
Pay Off Credit Card Debt: If you have any credit card debt upon graduation then make it a priority get that paid off immediately. You do not want to keep adding on to that debt, once you do it is nearly impossible to crawl out of it. If you have more than one debt then pay off the highest debt first. Once that is paid off, never use your credit card for more than you can afford to pay off the following month.
Build Up An Emergency Fund: Setting up an emergency fund is imperative, especially in today’s financial state. You should establish an account with enough cash to finance your living completely for at least 6 to 9 months. This is one of the first things you establish upon securing employment.
Pay Yourself First: Once your emergency fund is completely set up then comes setting up a savings account. This is one of the main things every financial planner has ever recommended to me. This account is completely separate from your emergency fund. Setting aside at least 5 – 10% of each check is a good place to start. You have to stay within your budget, so do not set aside more than you can afford.
Disclaimer: Article written using Genworth Financial Educational Resources.