Saying that life after college is unpredictable would be an understatement. For the first time in your life, you’re officially left to venture off on your own and for those who aren’t prepared, it can be a frightening time. This is especially true when it comes to money. If you’re fortunate enough to have help from your parents, you don’t have much to worry about. But the majority of us don’t have that luxury, so careful planning is crucial. If you want to avoid the need for last-minute signature loans in the future, now’s the time to work out a budget you can stick with for the long haul. Here are just few tips that will help keep your money in the bank so you don’t have to move back in with mom and dad:
During your college years, you could simply take the bus or bike around town to get wherever you needed to go. That’s because most college cities have easy access to everything you need in easy reach. But in the real world, you’re going to need something a little more reliable than a road bicycle to get around. While you may be tempted to treat yourself to a brand-new car, straight from the dealership, you should think twice before signing the loan. The average monthly payment for a new car can be upwards of $400! And that doesn’t include gas or insurance. To keep your bills light, go for something used. Used car lots offer cars that are in great shape and have been well taken care of by their previous owners. Used vehicles cost way less and the monthly payment will be a lot easier on your budget too.
Health insurance is probably something you never had to worry about before. That’s because mom and dad had you covered all those years. But now that you’re officially on your own, it’s time to get your own coverage. Beware, health insurance can get pretty expensive. The average health insurance premium was $400 in 2016 and could cost even more depending on where you live and what kind of plans your employer offers. Not to mention the out-of-pocket costs for deductibles, copays and prescriptions. To find affordable insurance, find out exactly what your employer offers. Take time to study the different coverage packages and consider the less expensive ones. If you’re young and don’t have a long history of medical complications, you probably don’t need all the bells and whistles. Opt for the cheaper premium to save a bundle on monthly payments.
Nobody wants to start out in life owing a small fortune, but that’s exactly what happens to new graduates. Student loans are among the top reasons why young people struggle from the get go. Fortunately, all federal student loan lenders provide a 6-month grace period after graduation. This means, you don’t have to shell out any cash before getting a chance to land your first real-world job. You’ll have 6 months to find a steady income. Then, you can start tackling the monthly payments. Use your grace period wisely. If you’ve already landed a job within the grace period, this is the perfect time to build up a savings. If you can’t afford your monthly payment, there are other financing options available to help you lower your monthly bills.
If you want to avoid a financial emergency, have an emergency savings in place. These days, the majority of people don’t have anything saved and it usually costs them a lot of stress when an unexpected emergency inevitably comes up. To avoid any future financial hurdles, commit to setting aside a small portion from each of your paychecks into a savings account. You can easily set up an automatic transfer with your bank so you can save without ever lifting a finger. It takes a little bit away from your paydays now, but it’s absolutely worth the small sacrifice down the road.