The first question about managing your money right after you have graduated from college is not “How do I manage my money?” it’s “Do I have any money?” Recent college graduates are not well known for their Bel-air mansions, luxurious trips to Rome, or their ownership of skyscraping Vegas casinos. The image of the recent college graduate looks pretty similar to the image of the college freshman, just older and more isolated. It is one that involves cramped living conditions, a Top Ramen based diet, and emails from your bank account heavily featuring the words “insufficient” and “funds.” But just because money management concerns are less complicated for the recent college graduate than they are for the Beverly Hills billionaire, it doesn’t mean that they don’t exist.
Whether you went to Pepperdine University or Purdue University, your lack of money and your incoming student loan payments are forcing you to face more money management issues than you have ever faced in your life. Hopefully, you are coming up with answers. If not, start by following these 5 money management tips for the recent college graduate.
- Open Up a Credit Card
Hopefully, you already open up a credit card in college in order to start building up a strong credit score. If you didn’t, it is time to delay the dreams of a good credit score, and focusing on being able to eat daily. You may have to rack up a bit of credit card debt at first, but responsibility and smart spending can make your credit card a beneficial part of your financial life instead of a toxic one.
- Make Money
This one I am sure you have thought of already, but it is worth repeating. Notice that I didn’t say “Get a job” as I’m sure your parents have already said on the phone so many times. I said “make money.” You don’t need a full-time job to get funds coming in. Find creative ways to make some cash freelance style while waiting for your real career to come knocking.
- Move Back in with Your Parents
Sorry! But this is what every college graduate should do the first day of their post college life. Okay, not day one. Take a week for yourself, and then do it. It isn’t ideal or any person’s dream, but saving yourself from rent payments may be the only way to keep yourself afloat fresh out of college.
- Make a Strict Budget
Your scribbling of the words “Money equals zero” on your diner napkin does not count as a budget. Start an Excel spreadsheet of how much money you can spend on food, transportation, and entertainment, and stick to it. Actually update the sheet to track your progress.
- Keep an Emergency Fund
Hopefully your college job left you with some sort of savings account, no matter how small. You will be tempted the first time that checking account dips below ten dollars to make a transfer, but resist. That savings account is your new emergency fund.