For the majority of college students around the country Graduation just happened. At the school I work at, we just released 2600 newly minted students to the world to seek their fortunes. This is a scary time for most graduates. Entering the work force in the current economic climate is daunting, and they are faced with odds that are already stacked against them. And unfortunately, not a single one of those college classes taught them how to get out of debt.
Fortunately, there are specific steps that new college graduates can take to avoid falling into the consumer debt trap that so many of their fellow students find themselves in.
Continue your college lifestyle for as long as possible!
There is no shame in this, and the stigma of living on ramien noodles and single ply toilet paper is rapidly receding. In fact, I would say that adults who are long removed from their college years are increasingly moving back towards their “college spending” days to save money and avoid falling further into debt.
In college, you don’t need “stuff” because you have friends and real human relationships to occupy your time as opposed to china patterns and big screen tv’s. By avoiding the trap of lifestyle inflation as soon as you get a job, you will be able to establish a firm foundation, start paying off your student loans, establish an emergency fund, and even set aside money for your future (spouse, marriage, kids, house, new car, travel). Setting a plan, and understanding the downside of falling into lifestyle inflation will help you avoid these common mistakes.
Make a Savings/Spending Plan
One of the best pieces of financial advice my parents ever gave me was to set a strict budget and keep to it. Having a firm grasp of your budget and income needs will tell you very quickly the lifestyle you can expect to have.
In fact, if you have a Stafford Student Loan, you will be required to complete exit loan counseling when you graduate, and you will have the opportunity to create your first sample budget in that counseling session.
Understanding that a high income is got a right granted upon graduation will help you face reality, and plan accordingly. Sticking to your savings and spending plan, will help you keep that vision in check.
Having a plan is definitely key, or at least it is for me.
And welcome back, you’ve been missed. I hope the hiatus was due to a positive, though demanding, change in your life…
shanendoah@the dog ate my wallet recently posted..No Post
@Erin — Well, unfortunately, we have not brought home a baby. To be honest, I just got very overwhelmed with the adoption process, grad school, my “9-5 job, and the dreaded “Google PR Updates”. So, I just had to take a break. Life has slowed down a bit, and we have all of our paperwork done for our adoption. We are currently just waiting. Could get a call today or 6 months from now. Thanks for the kind words though, I have really missed writing and the community!
Trust me, I understand the overwhelmed. We’re prepping for the foster license home inspection, about to start background checks, and still doing probate for the MIL.
I’m glad you were able to take a break and get yourself re-centered. But I am also very glad that you’ve now come back.
shanendoah@the dog ate my wallet recently posted..Sunday Evening Post #43
Thanks! We have some good friends who are getting certified for foster care, and I know how hard they have worked, so I can only imagine what you are going through also.
And I am really glad to be back at it. I have missed it.
MoneyforCollegePro recently posted..How New College Graduates Can Avoid Debt
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Thanks for the tips. It should be followed by any newbie graduate. I myself worked extra hours during my college life, in order to be debt free in my after graduation life. That worked. Now I enjoy vacation abroad with my beautiful wife. I think a plan is always needed.
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@NOlan. Working extra hours, and doing what it takes to remain debt free after college is the perfect way to start the rest of your life. it sounds like you are now reaping the benefits!
Yeah, I can announce that my life is easier than some of my friends.
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My husband and I maintained our student lifestyle for the first year and a half after our marriage. Despite earning what amounted to minimum wage over that time, we managed to bank nearly $15k. It was a great way to start our marriage!
Elizabeth @ Broke Professionals recently posted..Our House On The Market: Month Three
@Elizabeth — Being on the same page with finances and working together to save money has definitely helped my marriage as well. it sure is an awesome way to start a marriage!
Sticking to the plan is not always easy but if done can reap so great rewards financially. It would be cool to hear your take on how to stick to the budget.
@Jai — Thanks for the comment, and a great idea to a follow up post! Thanks again.
MoneyforCollegePro recently posted..How New College Graduates Can Avoid Debt
This is a big help to each and every one of us even not as a college graduate.. Anyway, thanks for the tips shared here..
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@Karyll — I’m glad you found this useful. Sometimes, the advice we receive in college is some of the best advice we ever get…we’re just not ready to hear it at that point in our lives…
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