Whether you’re still trying to figure out what your next step is or if you’re one of the lucky few that are employed (congrats!), these tips below are great for all post-grad Quarterlifers as you make your way into the real-world.
- Pay off your debt. Chances are you have a few student loans to pay off or you owe your parents money for some of those spring break trips. While it’s not the most exciting way to spend your money once you have a source of income, paying back those loans should be priority #1 once you graduate. Not only is it best to pay what you can now so the interest doesn’t pile up, but it’s smart to do it now while you probably don’t have many other financial obligations (i.e. mortgages, diapers, children’s education…).
- Start saving now! Establishing the habit of putting money away into savings each month is important for two reasons. First, the earlier you put money aside, the more time your funds have to grow. Do a little research on options, such as Certificates of Deposit, to help your savings grow. The second reason is a little more mental – if you never get used to having that money on hand to spend, you won’t even miss it. Starting this habit early of putting aside a percentage of your paycheck each month will help you prepare for a comfy retirement or an emergency.
- Make a detailed monthly budget. It might sound terrible and grown up, but that’s because it is the grown up thing to do. You can’t rely on mental calculations to know what you owe or what you have left from your monthly income. It’s time to start a (gasp) spreadsheet or use a free tool such as Mint.com to keep track of what expenses are coming up and what you’ll have left over at the end of the month. This is also a great way to figure out how to start saving (see above)! See how this is all related?
- Establish credit – when you’re financially able. Understanding credit and working to establish it early is important, even if you aren’t planning on making any large purchases any time soon. Eventually, you probably will need to buy a car or a home and having a reliable credit history is extremely important in qualifying for those loans. An easy way to get credit as a Quarterlifer is to apply for a credit card. However, you still need to live within your means. Credit cards ≠ free/unlimited money.
- Avoid spending triggers. Are you a sucker for those promotional emails from your favorite online stores that show up in your email once a week? Unsubscribe, unsubscribe, unsubscribe! Sure, you might be getting 30% off but that’s still an additional shirt you weren’t planning on buying until they emailed you. They’re so sneaky. If you know a certain activity gives you the itch to start spending on impulse, do your best to avoid it for a while.
- Auto-pay is your BFF. Pretty much every utility company or leasing agent has an auto-pay option and there’s no reason not to take advantage of it. You can set it up so that your bill is automatically taken out of your checking account so you don’t have to mess with stamps (who uses those?), mail a check or freak out if you forgot to pay on time. Of course, this does not mean you can just forget about your bills and assume technology has taken care of it for you. Set a reminder on your calendar, phone or wherever, a few days before the bill is due to make sure that you have enough funds in your checking account and your payment is set up.
Personal finance in the real world is often not a required class in college – but for some reason Entomology is? [Look it up]. So it’s time to grow up and take control of your life and finances on your own. Talk to your parents, siblings or trusty financial institution (that’s us) about any advice or tips they may have as you’re starting out. There are probably a few things they wish they did differently and will be happy to tell you all about them.