For some, life after college seems like one big party—living without a care in the world. For others, it’s a nightmare that seems to have no end (and usually it has to do with money). If you’ve just graduated or are just a year or so out of school, right now is the time to wrestle your personal finances into shape. If you don’t, but buy in to the “I’ve got plenty of time to save money; I’ll start later when I’m earning more” way of approaching your new income (and outgo), when “later” comes you may be in a hole so deep you can’t see the sun anymore. For starters, avoid these all-too-common money mistakes that your friends are probably making right now:
Letting your paycheck get nickel-and-dimed to death by bank fees. More and more people are leaving brick-and-mortar banks behind and moving online. A popular online bank for young professionals is ING because of its no-minimum, no-fee savings and checking accounts. They’re FDIC insured and setting up an account takes all of five minutes (less time than it would take to drive to a local bank and park).
Not having a spending plan. Most people cringe at the word ‘budget.’ ’Spending plan’ sounds so much more appealing. Without deciding ahead of time where you will spend your money, it will make your head spin how fast it will fly out of your account and not be there when you really need it. Every dollar you make can be spent only once, so make it count by making your spending reflect your priorities, values, and future goals.
Not taking your credit score seriously. It doesn’t take long to ruin your score by being lackadaisical about getting your bills paid on time and opening too many credit accounts. Once in that horrible hole, it will take years to dig yourself out. In the meantime, you’ll lose out on the best interest rates for cars and homes and possibly miss out on a job. Never carry balances on your credit cards and loans that’s more than about a third of the total credit available to you.
Need some help getting started on the right track? Take a look at Dave Ramsey’s excellent program and online tools. www.daveramsey.com By taking control of your finances now, you can be confident that they won’t start controlling you later.
About this Examiner: Kathryn Marion is the award-winning author of GRADS: TAKE CHARGE of Your First Year After College!, the most comprehensive resource for navigating the world of work and independent living after graduation, as well as host of the book’s companion resource site, www.GradsTakeCharge.com. The print edition of GRADS: TAKE CHARGE is available through Amazon and other online booksellers. The e-book edition is available through e-junkie.
Kathryn also coaches students, graduates, and career changers as well as consults with small businesses and aspiring authors.