Graduating from college is a huge milestone in a person’s life, but after the ceremony, what comes next? Planning for your financial future seems a daunting task when you’re unsure where you’re headed. Still, it’s important to start preparing a little so you’re not taken by surprise when unplanned events affect your finances.
Whether you’re thinking about saving to buy a home, to travel, or to put some money away for retirement, there are several things to think about. Before you feel overwhelmed, sit down and write out some financial goals and think of some ways you can achieve them realistically. Ask for advice from a parent or trusted family friend who has been in your shoes, then follow these tips on how to start planning.
Set Some Financial Goals
Write down what you want to achieve and research what it will take to get there. If you’re ready to start your career, move out on your own, buy a home, or take some time off to travel, you need goals and plans. Start small on your list of goals. For instance, if you’re looking to buy a home, give yourself a timeline in which to save money and begin looking for the right neighborhood. Remember not to be too hard on yourself. Life is full of changes and setbacks, so keep the financial goals flexible and realistic for now.
Start Saving Money
No matter what your goals are, it’s a good idea to start saving money now. Life is expensive and you’ll want to be prepared for whatever it throws at you. Get creative and think of little ways you can save cash that won’t affect your daily life too much; for instance, ask a coworker if they’re willing to take turns carpooling, take your lunch to work rather than eating out, and make sure your apartment or home is energy-efficient to save on your utility bills. You could also cut out cable TV since there are so many inexpensive choices these days for watching shows and movies.
Help Others Help You Save
See if your employer will take a certain amount of money out of your paycheck automatically to put toward a 401K plan; this way, saving a little every payday is much easier, and since it’s taken right out of your check, you won’t even miss it. If you’re a freelancer who gets a 1099, you’ll more than likely have to find your own plan and be responsible for setting aside some money each week on your own. You can also download an app for your bank onto your phone so you can keep track of the balance in your checking and savings account and transfer amounts as needed.
Manage Your Credit Wisely
You may think you already know how to take care of your credit but it’s very easy to let it spiral out of control when you’re a recent college grad. Paying off student loans, financing a car or home, and buying furniture for a new place can all run up a credit-card bill and keep you in debt. When possible, save up for big purchases and don’t be seduced by the discount offered on your purchase when you open up a new account or credit line. If you do have to use a card, pay off the balance as soon as possible to avoid paying high interest rates.
Planning for a sound financial future can be an overwhelming task, so start small and ask for help from friends and family when you feel like you’re in over your head.
Guest post by Lawrence Mager, ReadyBrain.net.