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University graduation marks the beginning of the true appearance of adults. Goodbye, student discount. Hello, everything is priced.
You have received the guidance of the professor, the support of your parents and the friendship of the classmates at school. Now that you are alone, you may feel overwhelmed in your post-graduate life-especially managing your finances and responding to the economic changes of the pandemic.
Don’t be nervous we have you.
11 smart things for college graduates
This is a practical advice that we hope to share with us when we just graduated.
1. Don’t succumb to the expansion of your lifestyle.
I hope you can make more money than at school. Congratulations! However, use the increased salary for goodwill, not for financial losses.
Don’t succumb to Eager to buy everything Just because you made more money. You may also have more bills. Now is the perfect time to become a habit of saving money in the future (but we will cover more about this later).
In your post-university life, give yourself some time to make adjustments. Don’t buy all the valuable new furniture in an apartment at once.
The key is to live within one’s own capacity-or even below it, in order to establish a good savings buffer. It may take some time to figure out what it looks like.If you fail Budget method,try again. This is not a graded test.
2. Treat the bill due date as the transfer deadline.
Gone are the days when you will use a loan or scholarship to pay for four months of room and board at the beginning of each semester. Now, you have multiple bills within a month, and each bill is given to a different service provider.
Keeping track of when each bill is due is crucial. It is very helpful to automate the process of using the bank’s automatic payment service or choosing an automatic payment process with a utility company or mobile phone provider. If you want to be more aware of what happened to your checking account, set up a calendar alarm to remind you of the due date of each bill and make the payment manually.
Set a calendar alarm a few days before the due date to set an advanced alarm, and set another alarm on the bill due date as a backup reminder in case you forget to pay.
Make sure to take into account When You get paid. If your employer pays you every week, every two weeks or every half month, Budget the money you receive from each paycheck May be more useful than a monthly budget.
3. Get used to paying student loans.
If you borrow money to go to college, it’s time to pay it off.
Your loan provider may give you a six-month grace period before you start Student loan repayment. This gives you time to plan what to do with the repayment, but if you want to start paying back your student loan immediately, so much the better.
When setting the graduate budget, make sure to include student loan payments as a necessary expenditure. Please consult your loan provider to find out what your minimum repayment amount is. If this amount seems difficult to control, you may be able to use an income-based repayment plan.You might also consider Consolidate or refinance your loan At lower interest rates.
If your job has a student loan repayment plan, or pass Public Service Loan Forgiveness Program If you work in the public sector. Check if you meet the conditions.
If you can’t find a job or get stuck, Loan extension or tolerance Repayment of your student loan will be temporarily suspended. Usually, during this period, the interest on the loan may still increase, leaving you with more repayment opportunities. Delay or patience is usually only recommended as a last resort.
However, due to the pandemic, the government has issued Interest-free tolerance for all federal student loans Until September 30, 2021. If you have a personal loan, please contact your provider to see what options are possible.
4. Use credit cards responsibly.
Credit cards can be tricky.On the one hand, they can help you Build a positive credit score or Earn points. However, if you use them irresponsibly, you may end up in a mess.
It is wise to charge only what you know you can afford and pay the balance in full every month.You might want to start with one Secured credit card You have deposited a deposit that meets your credit limit there.
If you pay off your credit card debt, remember that those minimum payments are not your friends. If you don’t want your creditors to bother you, they are the minimum fees you must pay each month, but they won’t get you out of trouble anytime soon.
Even if you pay an extra $20, you have to pay extra for the debt, which can greatly reduce the interest you need to pay. If you did read your credit card statement, you should see the “Minimum Payment Warning” section, which explains how making only the minimum payment will increase your total debt and extend the repayment time.
The prerequisite for repaying more than the minimum fee is to pay off student loans, auto loans and even mortgage loans.
5. If you are going home, please make a plan.
These days, there is really no shame Move home after graduating from university. However, you will regret that you moved home without a plan.
If you go back to the high school days when mom and dad took on daily financial affairs, when you finally leave the nest, you may be ready for a more challenging transition.
Discuss with your parents your expectations of paying household bills and expenses. If they insist that you not pay any rent, put aside the money you should have paid to save your own place or establish an emergency fund. Speaking of…
6. You need to have an emergency fund.
No one likes to prepare for the worst, but saving money in an emergency is a key part of financial security.
Experts say you should save three to six months of expenses Emergency fund. Those who saw savings dry up during the pandemic may wish to save more. But if your car breaks down or you need to fly out of town to attend a funeral, then even just $1,000 can save lives.
You can automate savings by assigning a certain percentage of your salary to a savings account.or Use apps like Digit to save money. Digit’s algorithm will analyze your income and expenses and determine a safe amount to automatically convert to savings.
Even if you just Hide the five-dollar bill in a jar, Immediately start saving emergency situations.
7. Create a sunk fund to save a lot of money.
A sinking fund is a pool of funds that you regularly increase over time to make large expenses easier to manage.
Don’t limit your savings to only your emergency funds. When you are about to upgrade to a new laptop, or when you encounter an annual car insurance bill, you want to save them gradually.
Configuration Sinking funds For those infrequent expenses, you can avoid scrambling.You might want Open a separate savings account Meet your different short-term savings goals. If you deposit all funds into one account, please record your contribution amount and the balance of each target.
8. Save for immediate retirement.
I know you have just started your career. Retirement may be the last thing on your mind. However, the sooner you start saving for retirement, the better your life will be.
thanks to Compound interest, The 22-year-old will save $200 a month, a growth rate of 6%, and will have $371,428.72 by the age of 62. In contrast, people who start to retire at the age of 32 will only have $189,739.65 by the age of 62. Those under the age of 32 must save nearly $400 a month to save more than $370,000 at the age of 62.
That is a big difference. Start now.
Choose to participate in your work 401(k) plan As long as you have the ability. At the very least, you should make enough contributions to meet your employer’s requirements.
If your job does not provide a 401(k) plan, you can open Individual retirement account or IRA. Even if you have a 401(k), you can turn on the IRA to get more savings.see this Retirement Savings Guide Learn more about how to save for your future insights.
9. Avoid being underpaid.
Budgeting focuses on how much you spend and how much you save. However, the money you make is equally important.
Although your salary may increase throughout your career, your early income will greatly affect your lifetime income. Therefore, a few states such as California and New Jersey have prohibited employers from asking about their salary history regarding job search experience. If you start to work at a lower level than others in your field, then you may earn less money in subsequent work.
This is why it is important to ensure that you are provided with a fair and competitive salary from the start.Sites like this Glass door with Salary scale Provide salary estimates for different fields and companies so that you will not accept low-key offers.
Embrace the art of salary negotiation and bargaining with confidence, even if the idea makes you sweat.continue reading How to negotiate your salary like a boss Before your next interview.
When considering job opportunities, don’t forget to consider the company’s benefits and any other allowances. For you, it may be worthwhile to accept a position with a slightly lower salary that covers health insurance premiums, provides a large number of 401(k) matches and allows you to work remotely, reducing transportation costs.
10. The budget is based on actual wages.
When it comes to salary, know that the salary you agree to will not be the money you take home. That is your total income. Based on how much you can spend and save the net income, this is the net income after deductions.
The following amounts are usually deducted from your salary:
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Taxation (federal, state and/or city)
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Medical insurance and social security (may appear as FICA on your check)
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401(k) contributions
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Health insurance premium
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Short-term/long-term disability insurance
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life insurance
If you have not received the first check, then ADP is great Salary calculator After deducting taxes and other deductions, your take-home salary is estimated.
Certain deductions (taxes, medical insurance and social security) are not optional. When it comes to other people, you will have choices, such as pensions and various insurance plans.
If you are under 26, you can Stay in the parent’s health insurance plan. However, if you do not live with your parents and all doctors in your area are not on the network, you can choose to join your own plan.
The value of having disability insurance is that if you cannot work, you will be able to earn part of the income. This may include short-term absences (such as recovering from childbirth) or long-term absences (such as severe injuries).
If you want to know if you can benefit from a life insurance policy, This article Can help clarify some information.
11. Get busy on the side.
You don’t have to work full-time 24/7, but when you are young and have plenty of time and energy, you have a lot to say when you are busy.
Find ways to profit from your interests and talents. For example, if you like baking, you can sell homemade cakes on special occasions.View this list 25 small things on the top side.
You can use the extra income to repay student loans or other debts. Or, you can use it to establish an emergency fund or save to spend a good holiday. If you find that you are unemployed, such as when the company is downsizing, having collateral compensation can also give you income to rely on.
Another benefit of being busy is that you can develop skills and network to help you take advantage of a promotion or higher-paying job.
Nicole Dow is the senior writer of The Penny Hoarder. Ten years after graduating from college, she tried to make up for a bad decision-to maximize her credit card number and not start saving for retirement early.
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