Whether you are graduating high school, college or some higher level of education, congratulations! But also, we sincerely hope that you have prepared for this pivotal moment in your life.
Academia is certainly no walk in the park. You are tested intellectually, emotionally and sometimes physically, pushed to your limits to ensure you gain the proper knowledge and skills to build a successful career. Yet, rarely does academia ready you for minutia of life outside school — particularly the financial burdens you are about to assume.
Before you leave school forever (or just for now) you need to take a few steps to adequately secure your financial future. Here are some tricks and tips to enact today.
Start Building Credit
Ideally, you started building good credit way back in your teenage years, when a parent co-signed for a credit card and helped you decide when and where to use it appropriately and helped you pay it off. Then, as you venture into adulthood, you will enjoy a solid foundation of good credit. However, if you haven’t yet opened any kind of credit account, you should do so ASAP.
Credit is incredibly important in adult life. Often, landlords and employers look into your credit history to get a sense of your reliability and conscientiousness. Eventually, you will need a good credit score to qualify for favorable loans for cars and real estate.
Credit is earned several ways, but the best way is to make small, regular purchases with a credit card and pay off the balance fully every month. If you need to use your credit card in an emergency and wind up with a higher balance than you can pay off, you should at least make the minimum payment every month and work toward paying down the balance to zero. Long-held credit accounts are more influential than new credit accounts, and sooner or later, you will want to diversify your credit with an auto or home loan. Then, you should reach the coveted above-800 credit score which opens so many doors.
Practice Your Post-grad Budget
Before you graduate, you should build a budget for your post-grad life. If you already have an internship or job lined up, you can use your soon-to-be salary to calculate your income, and you should try to estimate your expenses using available tools, like average rental costs in your area, your regular utility and grocery bills and more. If you have never made a budget before, you might take advantage of budgeting software, which guides you through the budget-building process.
Once you have a budget in hand, you should start to practice living by it. A budget is no use if it doesn’t impact your decision-making and lifestyle, and if you aren’t accustomed to adhering to a budget, you might benefit from a few months of training. This might also give you extra time to build emergency savings, which might help you through some rough patches at the beginning of your career.
Get Any Job
Speaking of your career, as tempting as it might be to wait around for the perfect job opening, the truth is you need to start earning income sooner rather than later. This is especially true if you have student loans or live in an area with a high cost of living; because your expenses are so high, you don’t have the luxury to lose money looking for your dream job.
If you can’t find a single available position within your intended career field, you should at least start earning money with a part-time job that doesn’t require much energy or stress. Entry-level jobs in the service industry, like in retail shops or restaurants, are easy to get, and though they rarely provide a living wage, they will give you some income to reduce the load on your savings. You might also look into freelance work in a field that utilizes your skills and knowledge. Though you should avoid settling into this lifestyle permanently, it can help bridge the gap between school and career.
Life doesn’t end after graduation — in fact, for most people, it only just begins. Regardless of what level of education you earned, you need to prepare for your adult life outside of school, which means building credit, savings and income.