When I graduated from college there were a few things I quickly learned about finances:
1. Student Loans
The first thing you need to do is reach out to the company that financed your loan. They will probably send something in the mail when it gets close to the time for you to start paying back loans, but it’s safer to contact them during the grace period. They will probably let you know when your grace period ends, when to expect your first bill and how much it will probably be. It will also give you a chance to explore your options to reduce your bill.
One thing I did was consolidate my loans. I also filed for an IBR to lower my monthly amount. Check out programs like SLS Managers to see if you qualify for loan forgiveness. For more tips on how to lower student loan debt, check out this Washington Post article.
Get out of it! Credit…it may not seem important now but it probably will later. If you have debt that needs to be paid it won’t really be possible for you to increase your credit score. You need to rid yourself of any debt that is bringing your credit score down (credit card or otherwise).
Everyone says it…start saving NOW. Before doing that, you should definitely take care of number two. Once you are able try to start saving a certain amount each month or year. I’d start with an annual goal of $2000 and put in more if you can. Simply putting $2000 in an account each year for 10 years (and not touching it) can lead to having around $1,000,000 saved by the time you retire.
Be realistic. Look at how much you spend a month on bills, food, gas, and other activities. Add in a certain amount for leisurely activities. You know you’re going to spend on “fun” items, it’s better if you set a budget and stick to it. You’re going to go crazy if you don’t give yourself some wiggle room. Not sure how to document your budget? Send me an email and I’ll send you the forms that I created for my budget.
5. Cutting Costs
Shop with the intent to save. If you need to buy new clothes consider thrift shopping or shopping exclusively in the sale section. I recently did this at Urban Outfitters and they happened to be have a 50% off sale of the sale section. I got quality high waist jeans for $10 and shoes for $5. Don’t forget about coupons. If you’re shopping online google promo codes or check out RetailMeNot. Groupon and Living Social are also great ways to enjoy activities for a cheaper price. Budgeting doesn’t mean you have to be boring.
It may be a while before you reach this step. Once you’ve set aside money in your savings account and an emergency fund (6 months of monthly expenses) in a separate account, you now have the option to invest.
Some books I recommend are
- The Essays of Warren Buffett: Lessons for Corporate America by Warren Buffett
- Beating the Street by Peter Lynch
- The Intelligent Investor by Benjamin Graham
- Think and Grow Rich by Napoleon Hill
- I Will Teach You To Be Rich by Ramit Sethi
- Debt Free by 30: Practical Advice for the Young, Broke, and Upwardly Mobile by Jason Anthony and Karl Cluck
- The Money Book for the Young, Fabulous, and Broke by Suze Orman
- You’re So Money: Live Rich, Even When You’re Not by Farnoosh Toorabi
Have any books or tips you’d like to recommend? Comment below or send a message to firstname.lastname@example.org.