Graduation is a life altering time. I will be completely independent from my parents’ finances, and be responsible for paying rent and utility bills, buying groceries and gas, paying my cell phone bill, and purchasing my own insurance coverage, all while paying off student loans AND starting a new job. This is a HUGE adjustment. How does someone prepare both mentally and financially for “independence day”?
To me, student loans are the most concerning of the expenses that have to be paid. Getting out of debt as early as possible is vital, but so is saving for the future. Money and finances can be overwhelming to think about regardless of your age, but especially so in your early 20s. Here are some things to keep in mind throughout the first few years after graduation.
- Avoid going out to eat. A meal at home can cost around half as much as a meal at a restaurant, not to mention leftovers can make the per-meal price of that home-cooked meal much cheaper. However, if eating out, order water (with lemon if you’re feeling regal) and avoid appetizers and desserts.
- Establish an emergency fund. There will always be unplanned situations, and an emergency fund will help in the recovery.
- Put a limit on indulgent purchases. Let’s face it, if you really don’t need it, it probably shouldn’t be in the cart.
- Research before you buy. There are so many discount stores (even for groceries) that sell a quality product for a much cheaper price!
- Avoid impulse purchases. I’ve done it, I’ll admit it. You have a bad day and want to partake in retail therapy, but trust me you’ll probably just be mad at yourself the next day for making that purchase. Give purchases plenty of thought before dishing out the money.
- Remember to have fun. Even though saving as much money as possible is the ultimate goal, we are still young! Fresh out of college and ready to explore, we are going to need some cash for travel and fun experiences. Don’t be afraid to reward yourself for doing so well managing your finances.
Practicing these techniques will make a noticeable impact on your wallet. Paying bills is inevitable, and paying off student loans is going to take a big toll on the ability to save. However, the sooner you can get out of debt, the more you’ll end up saving on interest, even if that means not putting as much into your savings right now. What other money-saving tips do you have to share with today’s young adults?