Quick Tips for Financial Success as a Post-Graduate
The running joke with college students about finally being a young adult is constantly searching for ways to financial success.
Today’s generation has perfected the art of “fake adulting”. If you’ve never heard that term, it’s pretty self explanatory: an adult who has a lot of responsibilities but half-asses a majority of them. I’m not ashamed to say that I am one of them.
Becoming an adult means 40 hour work weeks, searching for apartments, attempting to pay bills, saving up for retirement, and purchasing your first car.
Honestly, the list goes on and on and so do the tears of thousands of young adults preparing to take the leap into the adulthood come this upcoming Spring.
There’s no better time to organize your life than in the Spring time, so here are 5 tips and tricks to help you make a smooth financial transition in (fake) adulthood.
1. Use the 50/30/20 rule as a basic guideline for budgeting
If you’re unfamiliar it means 50% goes to fixed expenses (ex. rent, bills), 30% flexible expenses (ex. groceries, going out) and 20% savings.
I’ll admit that it’s much easier to budget when you have a steady flow of income, but it never hurts to get a head start.
Create Excel budget spreadsheets specific to your needs and separate them into monthly and weekly sheets.
Staying organized is the number one way to get a hold of how much you’re spending.
2. Open a store credit card
If you’re having trouble getting approved for a credit card under your name because you have no credit then try opening up a store credit card first. Make a few small purchases using the card every other month or so and pay the bill on time every month.
After 6 months to a year of no late payments your credit report will show that you are a low risk candidate and make it easier to get a credit card with more benefits.
Be sure to check the interest rate because they are typically high for store cards.
Tip: Open a credit card to a store that you don’t shop at frequently to avoid making crazy impulse purchases. I opened a Victoria’s Secret credit card two years ago and only used it when they had their 7 for $27 deal, so it was easy to make the payments consistently and on time.
3. Let the money work for you
If you already have a credit card and a steady income (key word being steady) then have all your fixed expenses automatically charged to your card.
You’ll never make a late payment and you will rack up rewards points when you use the money you had allocated for fixed expenses to pay off your bill monthly.
Before you know it you’ll be taking free flights due to all the points you’ve acquired.
4. Rent a room in a house
Depending on where you live and work; instead of searching for an apartment, opt for renting space in duplex or get a house with friends or co-workers. You won’t be living like Eloise at the Plaza but your rent might be negotiable.
In addition, bills would be divided and rent would be split unless each room is rented individually. There’s more space for your money and you’ll feel more at home in a cozy place with character.
Everyone dreams of living in a high rise studio apartment but sometimes you have to make some sacrifices to in order to get where you’re going.
Tip: Ask friends and coworkers if they know people looking for roommates or know of anyone who has a vacant room in a house/duplex for rent.
5. Purchase second hand vs. new when getting your first place
During your college years if you lived in pre-furnished apartments or dorms or used secondhand furniture left by the occupant before you, then you might not own any basic living essentials such as a bedroom furniture or kitchen appliances.
Instead of investing in expensive furniture and appliances that you may not even get to enjoy because your job requires you to travel frequently, then try re-purposing.
Start by going to your parent’s house and asking them if there’s any furniture and appliances they’ve been wanting to toss. Ask friends and coworkers who are moving if they are selling anything and be sure to check out estate and garage sales.
Tip: Furniture might not be in the best condition when you receive them but with a bit of sanding and staining, they could look brand new. There are a ton of DIY’s on Pinterest and YouTube.
There you have it, 5 tips to get you on the fast track to financial security at an early age. If implemented correctly you’ll be following the #1 rule, which is to live within your means.
Thanks for reading and stay hungry to learn, create and grow!