So you’ve graduated from college? Congratulations! Your hard work have brought you to this moment. You are now one of us. But remember: your real life begins this today.
As you are aware by now,
a college degree is required for succeeding in life these days. So you now have
your degree? What’s the next step? This is actually the time you wake up to
your life. As a college graduate I’m sure you won’t like to sleep-walk through
your life or to live a lifestyle that is based on other people’s expectations.
Of course it is your right to throw your cap in the air or to stage an Instagram photo of you throwing
your cap in the air. However, never forget that life after graduations brings
more responsibilities. This is the time to start developing and putting your
financial plans into action. So, I’m going to share some things that will help
you to develop a financial plan for living a life of purpose and greatness,
free from financial headaches. Here’s how.
Get
a job fast!
If you haven’t done so
yet, this is the time to do it: get a job. If you couldn’t find your dream job fast enough, it is perfectly fine to take any
part-time job that would help you to pay the bills and get by, while searching
for your dream job. There’s both nobility and dignity in doing that. As a
matter of fact, it is much better than living in your parents basement until
you are 30 or 40, waiting for your dream job to drop into your lap.
You
will need to create a cash flow
Creating and managing a
cash flow is very important in your life. Creating a cash flows begins with a
job: your wages or salary will be your cash inflow. Next, you will need a
process for tracking what’s coming in and going out. Any method you use to
track the movement of cash in your work life is just fine, provided that it
provides you with a way to find the money to fund your various financial
priorities. Many banks offers apps that can help you with this exercise.1
Alternatively, you may use other resources
like Digit,2 Mint, or You Need A Budget.3 The
bottom line here is that, when you manage your cash flow properly, you can get
more out of life. Believe me, sometimes a lack of money can be a problem without
equal.
Review
your credit report
It is very important that
you form the habit of visiting AnnuaCreditReport.com periodically to make sure
it is in good shape. Remember that the law entitles you to check your credit
reports from each major credit reporting agencies for free once a year. If you
find any mistake, such as social security numbers that don’t belong to you or
accounts that are not yours, notify the credit reporting agency immediately. To
review your credit report free of charge, visit AnnualCreditReport.com or call
1-877-322-8228.4 Reviewing your credit report at least once a year
will help you not only to prevent misuse of your identity but is also an
important part of managing your personal finances: your credit score may affect
your job application, your mortgage rate, credit card approvals, and even your
apartment requests.
Get rid of your debt
Having too much debts
hanging on your neck is a difficult and stressful way to live. So your first
priority when you get a job should be to get out of debt fast. The truth is
that debts of any kind are not cool. So, paying them off is more
important than going on vacation. If you are really determined to get out of
debt then you should realize that things like going to movies every week,
eating out or getting the premium cable package are less important. Note that
avoiding these things while getting out of debt, though difficult to do, are
just temporary sacrifices. Once you are debt-free, you can create more room in
your budget for dinning out and movie dates.
Build a healthy emergency
fund
An emergency fund simply
means a savings account where you accumulate cash for the sole purpose helping
you to maintain a normal life despite the emergencies that life hands you. Never
forget that there will always be a rainy day. You may lose your job. Your car
may need an expensive repair. You may need a security deposit for an apartment
rental. If any of these things happens you will have some room to breathe and
hence will not panic if you have emergency fund locked away in a savings
account. Financial planners recommend having as much as eight month of living
expenses stashed away in a savings account.5 This way you will have
sufficient cash to pay for unexpected expenses, rather than relying on credit
cards and drowning yourself in debt.
References
1Schlesinger,
J. (2017, May 21). Congratulations Graduate! Now Start A Money Plan. Baltimore
Sun, p. 20.
2Gensler,
L. (2017, April 11). Digit Is Testing Its Users' Loyalty With A New Monthly
Fee. Forbes. Retrieved from https://www.forbes.com/sites/laurengensler/2017/04/11/digit-savings-app-introduces-monthly-fee/#4df9513c2842
3Ravenscraft,
E. (2016, March 13). Budgeting Software Showdown: Mint vs. You Need a Budget. Life
Hacker. Retrieved from
http://lifehacker.com/budgeting-software-showdown-mint-vs-you-need-a-budget-1764607246
4Skowronski,
J. (2016, October 24). Does Checking My Credit Score Hurt My Credit? Credit.com
Inc. Retrieved from https://www.credit.com/credit-scores/does-checking-my-credit-score-hurt-my-credit/
5Hamm, T.
(2014, August 26). A Step-By-Step Guide to Building a Big, Healthy Emergency
Fund. The Simple Dollar. Retrieved from
http://www.thesimpledollar.com/a-step-by-step-guide-to-building-a-big-healthy-emergency-fund/
