Graduating from school can be a huge relief to a young person. That relief may come with a little celebrating that could get out of hand when it comes to personal finances though. Overdoing it on things like a new car, fancy clothes, furnishing a new apartment, dinners out, and more can leave someone who is already in tight financial quarters digging themselves deeper into debt. And while saving money might be the furthest thing from your mind, and honestly, there might not be much to save at this point, shortly after graduating could be one of the best times to start working toward squeezing out a few bucks to put away for your future.
Maintaining pieces of the college lifestyle
College can be a struggle both educationally and financially. Many of us find innovative ways to stretch a dollar in our college years. Whether it’s reselling books online or using milk crates as our bookshelves, there are all kinds of creative money savers that we may pick up in college. Taking some of these cost-cutting methods along with us into the post-graduate years can pay off with big savings.
That’s what my future wife and I did at least. Sure, there were a few pieces of new furniture needed to furnish our new apartment, but nothing extravagant. A couple hundred bucks at most for a new dining room table and chairs, a coffee table, and a few lamps and accessories complimented a computer desk from school and many of our same dishes. And yes, my future wife and I would treat ourselves to a steak dinner now and again, but this was only occasionally and interspersed between many pasta dishes and other meals made at home. Meanwhile, we drove our same cars from school and added a few nice new pieces to our work wardrobe to compliment much of our existing clothing.
Continued expense sharing
I had roommates throughout college who helped lighten the overall cost of many living expenses, and it was no different after college. Well…a little different considering I was living with my future wife rather than dorm roommates or fraternity brothers, but the financial results were similar. We were able to share expenses related to rent, transportation, utilities, food, furnishings, and more. In turn, this allowed me to start saving money even on a fairly limited income.
Cutting debt as quickly as possible
When I started out, my income was extremely low. In an entry-level position within the hotel industry, I was making more than minimum wage, but not much. And I was still carrying student loans from college.
However, through keeping costs low and expense sharing, I forged ahead, making debt payoff my main financial goal right out of college. I took out a no-interest loan from a family member and put all extra income toward paying off my student loans as quickly as possible. Within a year, I’d rid myself of all my loan obligations and paid back the family member in full.
Once I’d paid off my debt, I could focus more on saving. Still, income was at a premium and I wasn’t left with much at the end of each month to put toward savings. This didn’t deter me though. Instead, I began with small financial goals and grew them over time. My first goal was to save $1,000 as a cash emergency fund. As soon as I reached this amount, I raised it to $5,000 and then $10,000, at which point I began spreading out my savings into things like savings bonds, certificates of deposit, and a stock purchase program and 401(k) plan through my employer. At the same time, I continued bumping up my annual savings goals moving from $10,000 to $20,000, and so on as income increased and returns on savings and investments grew.
And in these ways, even with money tight, I was still able to save after graduation, starting earlier and making it easier to learn valuable money-saving lessons while still having the time to put them to use.
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The author is not a licensed financial or educational professional. This article is for informational purposes only and does not constitute advice of any kind. Any action taken by the reader due to the information provided in this article is solely at the reader’s discretion.