You worked hard for four years to network, maintain a good GPA and make yourself marketable to potential employers. All of the goals that you set for yourself freshman year have been achieved. As you walk across the stage Arch Ready, you can rest easy knowing that your hard work has paid off.
Life is good
According to NACE, the average starting salary for a bachelor's degree graduate from the Class of 2015 stands at $50,651. For most graduates, this is the most money that they have ever possessed. In order to secure a good credit score and achieve your long term goals, you must begin practicing smart money management immediately. Follow these simple rules to take control of your finances and prepare for the future.
Create a Budget
When you see how many zeros are on your first paycheck, your first instinct may be to spend it on something that you have been wanting for a long time. BIG MISTAKE. Even though you now have additional income, you must carefully mange your money.
A good budget will help you track your monthly income and expenses in order to separate what you want from what you truly need. Map where your money goes each month through a spreadsheet or budgeting app.
Free Money Management Apps:
- Level Money
You will also need to track your spending through your bank statements and credit card bills. This practice will not only allow you to track your spending, but also make you aware of any suspicious charges that may appear on your accounts.
Set Savings Goals
Preparing for the future requires strategic planning. If you plan to own a house, buy a car or start a family, you will need to start saving now. Establish a realistic time frame for meeting your savings goals so that you’ll know how much you need to save each month. Once you have determined the total needed, add the amount to your monthly budget.
Pay Off Debt
Paying off debt quickly not only allows for more financial freedom, but it also saves you hundreds or even thousands of dollars in interest. Create an aggressive payment plan to pay off medical bills, credit cards, and student loans.
According to a recent Edvisors study, the average 2015 graduate has more than $35,000 in student loan debt. This amount is expected to increase for 2016 graduates. Pay more than the minimum requirement each month if possible. If your loans are in deferment, try to at least pay the interest on the loan each billing cycle. Some employers may even offer student loan repayment assistance. Use this benefit to supplement your budgeted payment so that you can maximize your monthly loan payments.
Build an Emergency Fund
While you do not want to think about needing an emergency fund, planning for unexpected life expenses is a smart decision. Job loss or a major medical emergency can quickly deplete all cash reserves. An emergency fund will provide you with the peace of mind knowing that you are financially prepared for any unexpected expenses. The key to an emergency fund is to only use the fund for EMERGENCIES. Start an emergency fund with at least $500 and add to the fund each month. You will need to have enough money in the fund to cover at least 3-6 months of expenses.
Start Saving for Retirement
For a recent college graduate, retirement is probably pretty far down on your priority list. In reality, early retirement planning is a very smart decision. The more that you save early, the more compounding interest you are able to take advantage of to build your nest egg.
Carefully review your 401K plan in order to maximize its benefits. Many employers offer retirement matching plans. If your monthly budget will allow, contribute enough money to your 401K in order to receive the full employer match amount. It is basically like getting free money!
Your first job is the foundation for a successful career. A carefully planned money management system will ensure that you are able to build upon that foundation and secure a bright future.
Here is another resource offered by the UGA Career Center to help you negotiate:
- After Athens guide, which includes a budgeting worksheet and resources