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If you’re graduating from college, you’re probably facing a host of decisions. Do you want to get an entry-level job or continue on to graduate school? How much do you want to save for retirement? What kind of debt do you want to take on? What kind of credit card debt do you want to have?
The advice that follows is not comprehensive, but it does give some general guidance for those who are just starting out in their careers.
This seems like common sense, but it’s important to get started on your financial planning early. In addition to the basics like buying insurance and getting a cell phone, here are some things that many young people forget: auto insurance, renters insurance, life insurance, health insurance and disability insurance (if applicable).
Having all of these things covered will save a lot of headaches down the road.
Consider Type of Job
Consider what type of job you want to have when looking for a place to live. If your goal is long-term stability with a comfortable salary, look for neighborhoods with older homes where property values have gone up rather than down in recent years (the exception would be if you really love living in Manhattan).
The type of job you have will have a lot to do with the type of neighborhood you’ll want to live in. If you want to be close to work, it’s probably not a good idea to live in an area that has high crime rates.
Consider Your Career Goals
Think about what you really want out of life and work toward those goals, even if it means making compromises along the way. Take into account what kind of hours you want to work and how much vacation time you’d like (this will vary by industry).
For example, if you want to be a graphic designer but also need to work a part-time job to make ends meet, you might want to consider working as a graphic designer and also taking a part-time job in order to meet your other financial obligations.
If you are considering taking on debt for school, take into account how much money you’ll have available after graduation. Be realistic about what your finances will look like after graduation and whether or not the debt will be worth it.
If you don’t have any money saved up, think about what other things in life that are important to you – whether it’s paying off student loans or saving for retirement – and put those goals ahead of your educational expenses.
Consider the Right Credit Card
Choose a credit card that fits your lifestyle, rather than just applying for the best credit card available. Credit cards can be very expensive and they tend to have an annual fee (even if they are free or low-fee). You may end up spending more money than you realize on interest payments on your credit card balance, as well as annual fees (if applicable).
A good rule of thumb is to choose a credit card that charges no annual fee and doesn’t charge interest on purchases (no foreign transaction fees either) with at least 20% off any purchase or balance transfer fee.
This way, when it comes time for you to make a purchase, you can choose the most beneficial card for your needs.
Learn How to Balance Your Checkbook
Paying bills on time is essential for maintaining good credit and keeping debt from piling up. It’s also important to keep track of your spending and make sure that you’re not spending more than you earn (which is also a form of debt).
Make sure that you are able to cover all of your monthly expenses (including car payments, student loans, rent, insurance, etc.) with what you earn each month before taking on any new debt.
Learn to Negotiate
Learn how to negotiate with creditors when negotiating interest rates or other terms. In general, the better credit rating you have, the better deal you’ll get when it comes time to pay off any debts.
If there are several people in your family who will be responsible for paying off debts, consider working together rather than against each other
Joint ownership of a home can also help in situations where one person may be unable to pay off debts as quickly as others due to work schedules or financial hardships (such as a job loss).
Consider the Fees
You should consider the fees associated with certain types of loans. Loans such as credit cards and student loans usually have fees associated with them. You may be able to negotiate a lower interest rate on your loan if you opt for a different type of loan.
If you’re looking to buy a home, consider putting money into an investment account rather than taking out a loan to pay for the down payment
Putting money into an investment account will allow you to borrow against the account in the future when it comes time to buy your first home (assuming that your investment account will be worth more than what you owe on the house).
In addition, it’s important to put money away for retirement early on, so that you can build up a nest egg before you start working in earnest (unless of course, you plan on retiring early).
Start thinking about how much debt you want to take on
This can be one of the most difficult decisions when it comes time to graduate from college because it involves personal finance issues that many people are not comfortable with talking about.
If there are certain types of debt that scare you (such as credit card debt), consider having someone help you evaluate whether or not those debts are necessary for your goals
When it comes to financial advice, the important thing is to keep things in perspective. Do not get too bogged down in the details of your finances. Instead, focus on the big picture and do what you can to put yourself in a position where you’re able to live comfortably for the rest of your life.