Tips – To the millions of college and high school seniors who recently graduated (and to their parents, who weathered the ups and downs of reaching that summit):
congratulations on a job well done. After the celebration dies down, youâ€™ll no doubt be eager to embark on lifeâ€™s next chapter, whether itâ€™s finding a job, preparing for college or enrolling in military or community service.
Before you jump in feet first, however, let me share a few financial lessons I learned the hard way when I was just starting out. They might save you a lot of money in the long run and help you get closer to your life goals, whether itâ€™s buying a house, starting a family or even retiring early â€“ as far off as that may sound.
First, pretend youâ€™re still a starving student. After landing your first full-time job, the urge to go on a spending spree for new clothes, a better apartment and a car from this decade will be irresistible after surviving on ramen noodles for four years. But unless you had generous scholarships or a rich aunt, youâ€™re probably already saddled with thousands of dollars in student loan debt.
After youâ€™ve factored in rent, car payments, renterâ€™s and car insurance, credit card charges, student loan balances and other monthly bills (not to mention payroll taxes such as Social Security tax, which went up 2 percent this year), your new salary probably wonâ€™t go as far as youâ€™d like, especially if youâ€™re trying to save for one of those life events.
Thatâ€™s where a budget can help. Find a way to calculate your income and expenses.
Next, know the score, credit-wise. Many people donâ€™t realize until itâ€™s too late that a poor credit score can trash your financial future. After youâ€™ve missed a few loan payments, bounced some checks or exceeded your credit limits, youâ€™ll probably be charged higher loan and credit card interest rates and offered lower credit limits (if not denied credit altogether), unless and until you can raise your credit score. You may even have to pay higher insurance rates and harm your ability to rent an apartment or get a cell phone.
To know where you stand, review your credit reports to find out whether any negative actions have been reported and to look for errors or possible fraudulent activity on your accounts. -Businessday