Some say that saving money once you are a college graduate is already too late. The myth is you can only start when you have landed on your dream job. While most parents would constantly remind us to save during our college years, it is expected that young adults tend to do the opposite. They go shopping and partying many times a month with the credit cards that their mom and dad provided for their schooling. Instead of celebrating more after graduation, their credit card suffering can be felt more since their parents usually cut their financial support with hopes of them finding and maintaining a job.
In reality, only a few number of college graduates had saved during their college days and only a handful of them actually succeeded in their financial status. Most, if not all college graduates who saved years before their graduation, have been financially free, so does that mean that saving is really useless? We all know that saving is a good habit. If you want to be financially free in the near future, you need to build your own financial empire. It means that you need to establish a good amount of assets so that you can enjoy freedom from debt years from now. Here are some tips or rather some principles that college graduates need to grasp in order to survive the chaotic world of financial reality:
- The average college student gradates with a debt of $24,900 in student loans. Graduates should make it a top priority to payoff student loan debt as soon as possible or at least make payments on time. There are several handy calculators online to help you estimate your payments. In this economy, it is taking longer for some to find jobs. If you are unemployed or will have difficulty making payments, contact your lender immediately. Remember paying off debt and making timely payments on all your bills are an excellent way to build your credit history!
- Find a job. A “no” to your dream job is not the end of the world. If you can’t really get your dream job, find any job you like. Just make sure your pay is enough to be financially stable.
- Start saving each month to build an emergency fund. This is for true emergencies not for a vacation with your friends. The old piggy bank savings is not the right place to save, because it does not grow. Use direct deposit from your paycheck into a savings account or a money market account-try saving $20 per paycheck it will add up quickly. This will allow you to receive interest which can add to your money growth. Your goal should be to equal 6-12 months of your living expenses.
- Pay yourself first before anything else. Most people try to pay their bills and save what it left. This way, you will be motivated to pay your debt.
If you are familiar with the saying “ No pain, no gain” then you will realize that the only way to be financially free is not to sacrifice but rather to be more motivated to build first your assets rather than buy your wants or liabilities. It may take years but the results will be worth it.