You’ve finally graduated from university! You might be one of the lucky ones that get a job right out of university, or you might not be as lucky. Whatever, the case may be, no one told you that adulting would be this hard. You suddenly have to start paying all these crazy bills, including your student loan (if you have one), and have to start thinking about crazy stuff like getting married … or even having kids. *Shit just got real*
There are lots of things I wish I was told about money and adulting when I first graduated. A year after my graduation, and there are 4 things I know now, that would make your life much easier as a new grad:
1. Treat Your Credit Card Like A Date That’s Too Good For You
Credit cards come with a lot of problems and responsibilities and must be handled with care (Trust me, I learned the hard way). Yes, it’s nice to have a “cash advance” before you actually get paid and credit cards are also a good way to build your credit, but you have to understand that
“Credit Cards Are Not Free Money”.
With the average credit card interest rate of about 20% credit card debt can come back to bite you in the ass and can be the biggest debt of your life! Needless to say, You have to be aware of your credit card terms and spending limits and be sure to make at least the minimum monthly payment each month (although I suggest that you pay it in full if you have the means).
In short, treat your credit card with love, respect, and admiration – like a date that’s too good for you!
Read my post about how to use credit cards: Are Credit Cards A Good Idea
2. No One Cares About Your Fancy Car That You Can’t Really Afford
*Okay almost no one*
When you get your first job after uni, It’s easy to swipe your credit card at all hours of the day; simply because you can afford it.
You buy into lifestyle inflation. You move out of your parents house and start paying an exorbitant amount of money for rent so you can live in a fancy condo; you buy a car that costs more than you make in a year because all your friends have nice cars etc. But no one really cares about your car that you can’t really afford. You’re the only one that has to spend 30% of your income covering your car payments, insurance, and also 50% of your income on rent. You’re the only one that has to deal with your credit card debt and has to eat ramen for dinner like 5 days a week.
It’s much better to live below your means and save up for emergencies, retirement, or just for a well deserved holiday! Don’t be one of those guys/ girls that drive a $70,000 BMW and has to ask for $500 to fix the car. Just. don’t.
3. Time Is Your Biggest Ally
Once I graduated from university, I started trying to get my finances together, thinking if I would ever be able to afford a house of my own, or my dream car. It can all be overwhelming. If you’re just graduating from university, chances are you’re in your early twenties meaning you have time to prepare for all this – so, chill!
You’re young and you have time to save for all these important things, and the magic of compounding makes this easy (especially if you invest) . But you need to take advantage of the time you have and start saving as much as you can afford to.
Read my post on how to start investing: Read This Before You Invest In The Stock Market
So don’t worry yourself to death thinking if your dream wedding or car will ever become a reality, instead start with what you have and save when you can. The only way you can do this is through realistic budgeting.
Read my post on how to start budgeting: Build A Budget That Works!
4. Side Hustles Are Important
When you get your first full-time job for the first few months you’re excited that you’re getting paid. But after a while you start wondering, “That’s it?!”. But you don’t have to only rely on money you make from your full-time job. Guess what?
“You Can Make More Money If You Want”
There are a billion ways to make more money in your free time. One way I make extra income is by helping people write resumes and cover letters when I have some downtime or just need extra cash to buy something cute.
But other than making more money; it is important to diversify your income sources, as your job is no longer guaranteed (not in this economy, at least).
Find what you’re good at and try to make extra money from it.
What money problems do you/ did you struggle with as a new grad?