It's easy for college students to fixate on graduation day and lose sight of the big changes coming after they’ve hung up their cap and gown. Of course, some of the biggest changes that come with graduating from college and entering the workforce have to do with the new financial responsibilities one faces. Here are three financial steps college students absolutely must take before graduating college. So listen up, especially if you’re a junior or a senior!
And if you’re a recent graduate who is currently in that beautiful time after college graduation and before starting your first “real” job – I see you, Class of 2019 – then now is the perfect time to take action on the steps below while you have some extra time.
1. Set a Post-College Budget.
While in college, you may have had a part-time job to cover your tuition and living expenses, but if you’re anything like the average student, you probably had checks being written to you to cover a lot of your costs. These could have come in the form of scholarships, grants, or loans, or if you’re lucky maybe even your parents. But after graduation, these checks won’t be coming in anymore. There’s no financial aid for post-college life apart from the aid you give yourself. And if you’re going to have the financial success I know you want in life, you’re going to have to keep a tight budget, at least at first when you’re still early in your career. So before you nab that diploma, have an idea of what your financial situation is going to look like. You should at least know, on a monthly basis:
- how much your take-home pay will be
- how much your rent will be
- how much you will spend on groceries
- how much your car payment will be
- how much your student loans payment will be (more on that later)
- how much you will have left over to save and invest
Of course, you may not have a spot-on idea of what these numbers are yet, but at least create something of a post-college budget that you can tweak later. Doing this will prevent you from going overboard with that first “real” paycheck! In the old days, people had to write all these numbers down or put them in a spreadsheet, but now there are several budgeting apps that can help ease the pain of creating and monitoring your budget.
2. Get a Handle on Your Student Debt Situation.
If you took on student loans to help pay for your education, you’re not alone. According to the Federal Reserve, Americans now owe over $1.598 trillion of student loan debt. But the last thing you want to do is take the “ostrich” approach of burying your head in the sand and not taking stock of the situation you’re in when it comes to your student debt. So before you walk across that stage on graduation day, create a list of all your outstanding student loans with their balance, maturity date, and interest rate. If you aren’t sure how to do this, check with your school’s financial aid office. They will be able to help you with this, as well as put together a game plan for tackling your student debt. And remember, the sooner you take charge of your situation, the sooner you’ll pay off your student loans.
3. Take Advantage of All the Student Discounts You Can.
It’s no secret that one of the sweetest perks of being a college student – other than the fact that you can probably sleep in a lot later than the general public – is that major brands offer you otherwise-unattainable student discounts on some of their top goods and services.
So before you, consider these sweet student discounts:
- If you’re looking for a new computer, Apple offers special pricing for students and teachers on some of their most popular products.
- Planning a post-graduation trip? Expedia can stay on the lookout for you for special students-only travel deals.
- Comfy as they are, sweats won’t cut it in the office. Many clothing retailers, including ASOS and Calvin Klein, offer students a 10% discount on purchases, so you may as well shop now rather than later. Ask your favorite clothing store if they have a student discount; chances are they’ll say yes!
And if you’re looking for even more savings, check out this list of the best student discounts around right now.
Yes, you’re in college and hopefully having the time of your life, but you’re also an adult now, and being an adult means taking a long-term view of your financial future. So go ahead, live and little during this short but sweet time in your life. But be sure to take the steps outlined above to set you up for bigger and better things after your academic career ends.
Logan Allec is a CPA and owner of the personal finance blog Money Done Right. After spending nearly a decade in the corporate world helping big businesses save money on taxes, he launched Money Done Right with the mission of helping everybody – from college students to retirees – make, save, and invest more money.