In an effort to help young people make wise financial decisions as they begin life as independent adults, I wrote some financial advice for recent graduates. If you’re a recent college graduate and aren’t sure how to manage your finances during these tumultuous times, I hope these financial tips will help you get started.
Create a custom plan for your student loans
Due to the CARES Act, you likely will not have to repay your federal student loans and will not have interest incurred during this time. However, if you have a job, you should continue making payments because all the money will go toward your principal and allow you to get out of student debt faster.
If you haven’t found a job yet or are worried you won’t have enough money to cover your expenses, develop a personalized plan based on your personal circumstances and goals. You can consolidate and refinance your loans. If you consolidate multiple student loans into one, you only have to worry about one payment each month. Refinancing can also make sense because it can help lower your interest rate and ensure more of your payments go toward principal.
In addition, you may look for a job that allows student loan forgiveness. Although limited, there are some jobs that will forgive some or all of your student loans. These jobs are often in fields such as health care, education, and public services. Last but not least you can earn extra money with a side job. Your full-time job can be a great place to start your career, even if it doesn’t pay much. If so, you may have to do more work to pay off your student loans. Supplement your income with a side hustle and put all the profits from that side hustle toward your loans.
Reevaluate your expenses
Renting a luxury apartment or leasing a brand new SUV can be tempting, after all, you worked hard to get your degree. However, as the famous marshmallow test shows, delaying gratification can help you achieve your long-term goals. These goals can include important life milestones such as paying off student loans, buying a home, and/or retiring.
You’ll find that living in a simpler apartment and driving that old Honda can pay off in the long run, giving you the opportunity to save more money and start preparing for a secure future. more financially. So it’s important to carefully examine your expenses and determine where you can reduce them or at least keep them at a reasonable level.
You probably choose more affordable accommodation. Housing will likely be one of your largest monthly expenses. To stay affordable, you may have to forgo granite countertops or choose a studio apartment instead of a two-bedroom. You may also need to be more flexible with location and live in a less trendy neighborhood.
You can limit eating out. It’s great to grab lunch and enjoy happy hour with coworkers, but doing it too often can have serious consequences on your finances. Try to prepare lunches and cook them at home as much as possible. Remove unnecessary members and subscriptions. If you’re not using your gym membership or have given it up due to quarantine, delete it permanently and workout at home. Terminate subscriptions and other subscriptions that you no longer need or want. You can use an app like the Wants & Needs app to help you organize everything.
Of course you have to stay away from department stores. Yes, convenience stores are convenient, but you have to pay extra for them. Did you know that you can pay double or nearly triple for a bag of chips or a sugary coffee at the convenience store than at the grocery store? You may also have to pay extra just to use your credit or debit card. By eliminating trips to places like 7-eleven, Speedway and Sheetz, you can save your hard-earned money and be strategic in the way you shop.
Cheap ways for fun
You deserve to enjoy your after-school lifestyle, so make sure you take time to have fun. Even if your money is tight, try to set aside a little each month to do things you love. This way, you’ll always have something to look forward to and be motivated to continue saving, stick to your budget, and pay off your debt. Here are some ideas that can help you have fun without spending too much money.
Inviting friends over for a campfire. You can easily step outdoors and enjoy each other’s company without spending too much. Light your fire by offering graham crackers, chocolate and marshmallows, inexpensive ingredients for making s’mores.
If you enjoy being outdoors, find new parks in your area that you can go to with friends and family. You’ll enjoy the beauty of nature, spend time with loved ones, and get an effective workout without spending a dime.
You don’t have to book a night in a five-star hotel to get away from everyday life for a while. Although some campgrounds charge a fee, they are usually quite affordable and can give you the opportunity to go somewhere new for a day or two. Instead of going out for takeout or even eating out during coronavirus, experiment with different recipes from the comfort of your kitchen. Check out Pinterest for new recipe ideas.
Saving
Significant savings can give you much-needed peace of mind during a recession, pandemic, political unrest, or all of the above. Work to build and maintain an emergency fund that you can use if your car breaks down, you lose your job, or another unexpected financial situation arises. Be your payslip creator. Keep your emergency fund in a high-yield savings account or similar type of account that you can easily access at any time.
Your life is not a one-way street. “You’re probably under a lot of pressure right now to make the right career decisions,” Gates says. “These decisions may seem permanent, but they are not.” Gates remembers feeling pressured as a student. When he co-founded Microsoft in 1975, he thought he would “do it for the rest of his life,” adding that he was “glad” to be wrong about that.
