By Sarah Franco
When you graduate from college, you may be on your own financially for the first time in your life. You may have your first real job with at least a decent salary. The problem: it seems that everyone—from your landlord to your cell phone bill to that latest high tech gadget you’ve been eyeing—is competing for a piece of that salary. What’s a recent college graduate to do? Descend into a bottomless pit of debt? No! Get started off on the right financial foot by considering the 5 tips and tricks for real world financial management that I have described below. And remember: these are not the only ways to keep your financial resources in balance, but they are a good place to start.
1. That’s Your Budget and You’re Stickin’ to It. When finances are tight, it is important to have a plan for how you need and want to spend your money. Start with your monthly take-home pay (i.e. your income after taxes) and deduct fixed expenses, such as rent, student loans, car payments, etc. From there, figure out how much you can reasonably spend on necessities, like food, electricity, and clothing. If you can, try to factor in some fun activities or events. Work and rework your budget until you come up with something you feel comfortable with. Your budget may require some sacrifices and discipline on your part, but stick with it! It is worth the peace of mind.
2. Keep Credit Cards (and Their Balances) to a Minimum. The buy-now-pay-later allure of credit cards can be especially enticing to recent college graduates who are short on cash and big on dreams. It can be difficult to resist temptation, especially when a credit card offer comes with the chance to win a free vacation to a tropical destination. Yet, you should try to have only one or two credit cards at a time. This will decrease the likelihood that you will spend beyond your means, or miss your monthly payments. You will be grateful for an excellent credit score years down the road when you apply for a mortgage or business loan.
3. Make Like a Life Preserver and Save. Did your favorite uncle give you a generous monetary gift for graduation? Save it. Do you have a little bit of money left over at the end of the week? Save it. Did your company tack on a holiday bonus? Save it. Did your . . . well, you get the picture. Extra savings will come in handy if your electric bill is higher than you expected, your car needs a major repair, or, worse, you get laid off from your job.
4. Keep All of Your Bills in a Row. This may come as a surprise, but you are not the first person to attempt the my-statement-must-have-gotten-lost-in-the-mail routine with your bill collector. Whenever you receive a bill, put it in a safe place—ideally the same place—every time. Try a highly visible location, like a shallow bin on your desk. There is nothing worse than sorting through a pile of junk only to discover a bill that is months overdue.
5. A Reminder in Time Saves Dime. Rent is due on the 1st. The credit card payment is due on the 7th. The cable bill is due on the 12th. And the cell phone bill is due on the 17th, no, the 16th. With so many due dates to remember, how will you ever pay your bills on time? Simple: write them on your calendar! Even better: if you use an electronic calendar, like iCal, set an alarm to go off days before your payment is due. By paying your bills on time, you can avoid hefty late fees or finance charges.