So, you’ve finally made it out of college and into the real world. You are what most people deem independent, which isn’t a good thing because your parents don’t send you much-needed cash anymore. Low paying job, student loans to be paid off … oh, and you have to eat, too. What’s a college grad to do?
Understand your finances: The first step to tackling any problem is to understand what’s going on. Know how much it is you actually owe, earn and need. Finaid.org offers a variety of calculators that can help you work out how much you need to pay each month for your student loans, how much you need to save, and how much over your budget you are. Keep a spending diary to track your expenses. You’d be amazed at the total amount of cash you’re spending on “little things.” Plus, it’s easier to cut back when you can actually see all the unnecessary cash flow.
Cut down on spending: This should be obvious, right? When you don’t have enough money, something’s got to go. But most people don’t think realistically when it comes to cutting back. “I won’t eat lunch for a month,” they promise themselves, as they buy that new dress. “Dieting and saving money. Two birds with one stone.” Only when lunchtime rolls round, they can’t help feeling hungry. Before they know it, they’re short of cash … again. Set plans that you can actually stick to, and wait a while before making large purchases; give yourself time to think about whether or not you really need the item.
Earmark some money: Put 5% of your paycheck into a permanent savings account the day you get the check. Learn to do without the extra cash. Remember, just because you have money doesn’t mean you have to spend it all. In time, you can decide if you want to invest the money elsewhere, like in the stock market.
Use credit cards responsibly: Having a credit card is a good way to build credit for your future—as long as you don’t abuse it. The rule is simple: don’t charge things that you won’t be able to cover in the immediate future. Pay off your balance every month. Otherwise, your debt can quickly build and become even more expensive after the interest rate kicks in. It’s also a good idea to use a low interest card to reduce the cost of use.
Learn to find discounts: The websites of most fast-food chains offer coupons you can use. Also, consider getting membership cards of all the stores you frequent. If you can’t afford the costs of a membership card, ask a few friends if they’d like to share a card with you.
It’s not easy to stop random shopping sprees and deny yourself some “absolutely necessary” luxuries. But when the loans get paid off, and your relatives and friends comment on how money-savvy you are, it’s all worth it.