4 Smart Money Moves for College Graduates
College graduates are beginning to enter a very strange job market. The unemployment rate is high, but not because of a shortage of jobs. Some potential workers are afraid to return because of health concerns, some do not have childcare, and others are enjoying unemployment benefits.
The good news is companies are beginning to boost wages in order to attract applicants. The not so good news is that with rising wages the cost of living is likely to go up. And with prices going up, people will buy more in fear of inflation and will also demand higher wages to keep up. Then employers may be forced to cut back on staffing in order to absorb the costs.
With that said, college graduates need to be prepared to manage their money. Here are a few smart money moves to consider for those entering the job market.
1. Save for your future
Do you have an emergency fund? Where do you see yourself 5, 10, or even 20 years down the line? Make a savings plan to achieve your goals. Savings plan could involve paying off debt, buying your first home, or investing in your retirement. If you do not know where to start, try the 50/30/20 rule where 50% of your net (after-tax) income goes to living costs, 30% to travel and entertainment, and 20% to savings.
2. Start working
Truth be told, you may not land your dream job right out of college. You need to be willing to take any job even if it is just part-time or entry-level. While it may not be the job you want, you can continue your job hunt and still make some money. And, by working, you are improving your resume.
3. Spend within your means
You should not spend more than you make. Understand what your income is, and start tracking your expenses along with their due dates. Most debt collectors will understand if you need to move a due date to make payment – they are only a phone call away.
If you find yourself knee deep in student loans or debt, you need to start making some sacrifices. You may need to cut back on eating out, gym memberships, and even your living arrangement . If you live near your parents and they are welcoming you to live there, go and live there! Sure it is not ideal, but it is smart. In the meantime, you can set up a savings account for future rent and contribute to the fund monthly. Now if you do not have the opportunity to live with your parents, find roommates with similar savings goals in mind and share costs.
No matter what income you start making, a good money management plan is a must. Debt stress is a real thing and can lead to physical and mental health problems. Consider these smart money moves and feel free to contact one of our bankers today for any financial assistance.