Getting Your Finances Ready For Graduation

I’m so excited today to introduce Leah to you. She’s one of the new contributors here at Ginger & Co., and she’s all sorts of smarts when it comes to money. You can read more about her and the other contributors here.

Congratulations! You’ve hit the “apply” button on that graduation (or are about to). You’re starting to think ahead, which is making you both nervous and excited at the same time. And you’re starting to think, “What do I need to do in the next few months to get ready?”
In my experience, getting your finances ready for graduation is one of the most important things you can do to feel like you’re a real person.Most of your major decisions after graduation are directly related to money, so knowing where you stand is extremely important.
Build Up Your Savings Account
This is a big one. If you’re a senior in college and don’t have a part time job, get one. I’m all for spending time making memories and crossing off bucket list items, but you shouldn’t be sitting at your graduation ceremony with zero dollars in the bank.
[bctt tweet=”About to graduate? Here’s a few tips for helping your bank account through the transition.”]
Moving in to an apartment on your own can be expensive, and unless you received a signing bonus, you won’t be making money yet. I lived in a furnished house in college, so when I graduated, I had basically no furniture. Fortunately I was lucky enough to receive a lot of furniture from my boyfriend’s parents, but still spent about $600 furnishing my apartment.
Adjust Your Spending Habits Now
Do your parents help you pay for food? Are you on a meal plan? It’s easy to swipe a student ID and not realize just how much money you’re spending on food, or my biggest offender: coffee. As you get closer to graduation, start really looking at those receipts, and start understanding just how expensive eating at restaurants is. Bonus points if you start cooking for yourself before graduation, because you’re going to want to know how to cook when you’re paying for your own food.
Another thing to think about in terms of your spending habits are drinks. In college, a lot of social drinking happens in dorms and at house parties. In the real world, it happens at bars. And that $6.99 (I know, classy) bottle of wine you consumed at a house party just turned into a $25 bar tab. So while you’re still in college, enjoy those house parties, and be prepared to have one glass of wine out instead of five.
Start Planning For The “Real World”
Planning ahead isn’t aways easy, but knowing where you are and where you want to be is a key part of personal finance. If you’ve ever taken an economics course, you know that in business, Revenue – Expenses = Profit. Think of your life like a business. You want your revenue to be greater than your expenses so that you can make a profit (savings). Savings is super important (which is why “build up your savings account” is first on this list). So before you graduate and take off into the real world, start thinking about budgeting for all of your expenses (like student loans).
If you didn’t take a finance course in college, don’t sweat it, you’re not doomed to fail at personal finance. But you should be sure you understand the concept of a budget. Daily Worth has some great articles to get you started.
Set Some Long Term Goals
Saving money can be difficult when you first start out, but having some long term goals can help make that a reality. I highly recommend setting your first long term goals before you graduate, so that you can start your next chapter on the right path. Set a realistic financial goal at each of the following marks: one year, three years, five years, and 10 years out.
I recommend making the first years goal easily attainable (like adding $300 to your savings account over the course of a year) to help you feel positive about the rest of your goals. Your 10 year goal can be a bit more of a reach goal, that may change, but will help you think ahead.
The biggest thing you can do to get your finances ready for graduation is at the core of all of these suggestions. Be money conscious. Think about how you’re spending money now, and how that will change in the real world. Having a full time job isn’t quite the same as working 40 hours a week for the summer. There are a lot more expenses associated with living on your own, and a lot more decisions you have to make about your money. But I have full confidence that if you’re aware of those expenses, and make decisions wisely, you’ll be totally prepared for graduation (at least financially).