Congratulations! You’ve graduated from college and are starting your future as a responsible adult. Maybe you’ve started your job hunt to find that perfect career or perhaps you’ve already landed an amazing position that you dreamed of. Either way, it’s time to start thinking about your financial future.
Besides weekend plans, Snapchatting your friends, and Instagramming your dinner, there are a lot of things to think about when you are first starting out. If you’ve made the big move out of your parents’ house, you now have rent, utilities, and groceries in addition to transportation costs, cell phone bills and those big student loan payments. How can you make ends meet and still have a life? You need a budget.
While creating your budget, consider factoring in Life Insurance. No, you’re not too young for life insurance. Recently it’s been reported that more single people are buying life insurance. As a college grad, you aren’t thinking about death, you’re thinking about living. However, if you do have student debt or any loans that are co-signed, you need to think about life insurance. The last thing you would want to do is leave your loved ones with your debt. Life insurance while you are young and healthy is a responsible decision, and it’s cost-effective.
Here are some money tips for you new college grads.
Budget. How much money can you afford to spend each month? What you don’t want to do is spend more than you make. On top of your monthly expenses, you don’t want to add on credit card debt. Start by adding up your monthly needs. (No, your Starbucks latte isn’t a need.) Then, from there you have an idea of what monies you have left over to spend, or even better, save.
Avoid using credit cards.
We all have our wants, but there is a fine line between our wants and needs. That big screen TV for your Superbowl party or gaming night is a want. It’s okay to buy things if you can afford them. If you need to use credit cards to cover expenses that you cannot afford otherwise, then you are living beyond your means. If you’re using your credit card and paying it off every month for benefits, that’s different.
Life insurance.
When you’re in your 20s, getting sick or injured, and death aren’t in your thought process. Accidents do happen, illnesses do strike, and unexpected deaths are a reality, so you need to think about life insurance. Life insurance will help to cover funeral expenses, loans, credit card debt and other expenses in the unfortunate event of your death. While you are young and healthy is the time to lock in low rates. If you want to get married or have children anytime soon, getting life insurance early is cheap and you’ll already then be covered for those big life events.
Stop or cut back on expensive habits.
Smoking. Think about how much money you would save by quitting or just cutting back. You will save on medical expenses in the long run and also may qualify for lower life insurance premiums. More helpful information can be found on Quotacy’s blog Life Insurance for Tobacco, Nicotine, and Marijuana Users.
Eating out. Of course you can still go out, but if it’s a daily habit, it can be very costly. Have some friends over and get creative in your kitchen.
Coffee. Yes, some of us love a coffee fix, but going to the coffee shop can really cut into your budget. Even if you’re only going three times a week, it can cost you $50 per month!
Start building an emergency fund.
A savings account set aside for emergencies is essential. A rule of thumb from financial advisers is to have three to six months of living expenses saved. That’s a great goal to work toward. Unexpected car repairs, medical expenses, emergency pet care, major dental expenses and job loss are just a few reasons to pad your savings account.
Splurge on experiences and not material things.
If you can afford to splurge a bit, splurge on travel and experiences. The instant gratification of buying a new pair of designer shoes wears off rather quickly. The great memories you make on going on a road trip, vacation, or even to a fun concert will last a lifetime.
Just because you are out of college and ready to build your dream doesn’t mean the fun is over. You are just starting your next chapter which includes new responsibilities and priorities. You are starting to build the life you’ve always wanted. Along with building your dream, comes protecting your dream. It’s important to budget, protect your loved ones with life insurance, be mindful of expensive habits and live within your means and start making the best memories of your life.
