Help! I am graduating! Now what?
Graduating college or high school, then entering the workforce, can be a strange time.
Financially, your life may begin to look vastly different. For many of us, a shiny new income comes with a laundry list of expenses (also perhaps literally a lot of laundry to do).
Personally, I found myself confused. Even more so than normal. I struggled to capture everything that I needed to do to be prepared financially. I was worried about overspending, but also very excited to be less broke than before.
Having gone through this recently, I put together a checklist I wish I had been given before graduation to prepare myself.
Calculate your estimated “Net Monthly Income”
If you are offered a new job, they often give you income on an annual basis or on a hourly basis. They always tell you what it will be before tax. I would take that number and multiply it by about 75%. Then: if you are paid monthly divide by 12, if you are paid bi-weekly divide by 13, if you are paid hourly multiply by 160. That is what you will make monthly working full time after tax.
Spend less than you make (if you are smart, much less)
There is no ‘magic bullet’ in personal finance. If you are spending more than you make, you will be in a car with no gas. It might look like you are going somewhere, but upon closer inspection, you are just sitting still.
Have honest conversations
For many of us in school, our parents have helped us get through school. Before school is over, have a big conversation with them about what you expenses are moving forward. Will you stay on their insurance? Are you moving home? What has been paid for in the past that now you will have to pay for? While you are at it, be sure to thank them for anything they have helped with!
Put everything in front of you
Find every loan that you owe (check the interest rates). Find every bank account that you have. Log into all of them and book mark them to your computer browser. Write down the passwords in your diary. The worst thing you can do is bury your head in the sand. Wake up and smell the roses.
Set your financial goals
What do you want to do? Save lots of money? Pay off your loans? Buy a house? Few times in your life will you have such a change financially. This is a great opportunity to read up on your options and do some soul searching.
MAKE A PLAN!
You know what you make, you know what you owe, and you have your goals. Now go accomplish it. Don’t make excuses. “Housing is expensive!” “Wage growth is flat!”. Boohoo. You can make excuses or you can make it happen.
If you need it, get help!
If you are struggling or confused, get help! Do not suffer in silence. Feel free to reach out to me or someone else you trust.
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