After years of what felt like drudgery at times (enter final exams), you finally graduated from college. Young adulthood awaits, as does financial obligations that come along with it. Higher education probably taught you many things. From learning how to get a business up and running to becoming a strong leader, your college experience shape you into the person you are today. However, one thing you might not have learned is how to pay off your debt and keep your finances organized. In this post, we’ll be providing a few tips to help college graduates organize their finances and build stability.
List Off Your Financial Goals
Organizing your finances is going to take you a bit of time. However, before you can get everything in order, you need to have a few solid financial goals in mind. These goals are what help people stick to their budget and resist the urge to impulse buy. These goals can be short or long-term, depending on what your priorities are. A short-term goal would be paying off a credit card within the year, so you can have an extra bit of security. A long-term goal would be funding your future child’s college education. SMART goals are incredibly useful in this scenario as they break down each goal you have in mind. Make sure to research more about SMART goals, so you can have an easier time setting them.
Keep Your Debt Under Control
If there’s one thing that can throw your entire budget out of order, it’s not keeping your debt under control. Upon graduation, you have a six-month grace period to secure enough funds to start paying off your debt. Once the allotted time has passed, you’ll begin making payments. Your student loans can cost quite a bit every month due to interest rates. However, being a college graduate gives you a significant edge when it comes to student loans. This is because it makes you eligible to refinance student loans. To refinance your student loans, you must meet a few requirements. Once you’re certain you meet each one, you can refinance your loans into a new one.
Create a Strict Budget
With only six months to save, time is of the essence. Immediately start by creating a strict budget and stick to it. List off each of your monthly expenses and subtract your income from it. That’ll be the amount you have left over once everything is paid. One of the biggest hurdles people have when budgeting is finding a balance. The best method to use in this case is the 50/30/20 method. This is when you take 50 percent of your income for the necessities, put 30 percent towards any splurges, and the remaining 20 goes directly into your bank account. If saving as much money as possible is your goal, then you can have an even 50/50 by combining the 30 percent with the 20 percent.
Don’t sleep on savings hacks either, every dollar counts. There are money saving tips for food, clothes, socializing, and even pet care that you can employ to be sure that you are sticking to your budget every single month. Once you turn these hacks into habits you will find yourself hitting your goals consistently as a result.