How to Manage Your Personal Finances After College

Your Personal Finances

It probably felt like once you finally had your handle on your personal finances as a student. It was time to graduate, and now you have a whole new set of challenges to figure out. Post-college money management can be daunting, but getting off to a good start can set you up well for the rest of your life.

Rent or Buy?

As a recent graduate, what you are looking at accommodation-wise will vary a lot based on the salary you’re making and the local cost of living. If you’re in a position to buy a house and you know this is what you want from Your Personal Finances, then by all means jump on the property ladder. If you have the money for it but you’re unsure, don’t feel pressured. People will tell you buying is always better than renting, but renting can give you a lot more freedom, and you’re also not responsible for any major repairs. If you don’t yet feel settled in your location or career or you’re just not ready to buy yet, waiting is fine.

Saving on Accommodation

Most new graduates are not in a position to even think about buying a house. More likely, you are looking at getting a place with roommates. Some of your peers may be opting to move back in with their parents after graduation. While there are job and housing markets where this may be the only realistic option, if it’s at all possible, you should consider getting a place with roommates. Moving in with your parents may seem like a smart choice from a savings standpoint, but it can be tough to make that leap to full financial independence if you do this. You can afford to make some financial mistakes when you are young; learning to budget and economize at this stage will be a valuable lesson you can use for a lifetime.

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Student Loans and Other Expenses

One thing that may make moving out on your own seem less affordable is your student loan payments. These can feel like an overwhelming expense for new graduates. You might want to look into refinancing them, which may lower your overall expenses, specifically your monthly payments. Creating a budget will also help you save money. You should live within your expenses, and, just as you should have done as a student, avoid credit card debt.

Retirement and Other Savings

If your employer offers a retirement plan that you can contribute to, you should do so. Ideally, you should contribute as much as you can, but even if you can only afford a little bit from each paycheck, this will compound over time and form a valuable base of retirement savings. The other thing you should be putting money toward is an emergency savings fund. This should be kept in an account that you can liquidate easily, such as savings or money market. You should aim to eventually have a minimum of three to six months’ worth of living expenses in this account to get you through any emergencies, such as a health problem or job loss.


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