By Mikey Rox
Here’s the good news, new grads: You’re not as financially inept as the media por-trays you.
Stash Invest asked grads like you what they plan to do with their graduation mon-ey, and the results are comforting.
The largest percentage – 23.8 percent of those polled – plan to put the haul directly into savings while 21 percent will pay rent or other expenses. An impressive 19.2 percent plan to invest their grad cash, and a near equal amount – 18.7 percent – said they’ll pay down student loans with the money.
That’s a great start. But there’s plenty more to learn about savvy spending and sav-ing now that you’re in the real world. Here are a few essential tips to help you hit the ground running.
1. Commit yourself to being independent (No more asking for help – sorry!)
One month after you land that decent job is when you need to make a clean finan-cial break from the welfare providers you call parents. That gives you enough time to get your proverbial ducks in a row – and collect your first paycheck – so you can really start adulting. Mobile bill, car payment and insurance, gas, utilities, internet, groceries, rent – all that good stuff – should now be your responsibility if you have a job. And no hitting mom and pop up for extra cash because you spent all your disposable income buying Fireball shots for a future one-night stand. For starters, that swill is poison, and two, he probably would have gone home with you $30 ago.
2. Stop wasting money on stupid things
Millennials and lazy people around the world – along with their enablers – lost their ever-loving hive minds when the avocado toast guy suggested that maybe they should stop spending money on overpriced food trends and other luxuries if they want to afford a home. Certainly there are prevailing factors preventing many demographics from becoming homeowners, but I happen to agree with that author on this particular point. So here’s my advice to curb that practice: If you want to get ahead, especially if you’re on a tight budget, it’s critical to have self-control, say no to all the shiny things, and concentrate more on making extra cash instead of spending what little you have. You’re not entitled to anything you didn’t earn, and the world doesn’t owe you anything. The faster you learn that, the happier your heart (and wallet) will be.
2. Make a budget – and adhere to it – like your life depends on it
If you’re new to managing your own money, the best place to begin is with a budg-et. There’s a wealth of resources online to help you get started. The concept is simple: In one column list your expenses; in the other, keep track of your income and then crunch a few numbers to make sure everything balances out or, if you’re lucky, results in a surplus. Negative numbers in a budget are no bueno, but you al-ready know that, degree holder. Sounds like a hassle, but only if you like being broke all the time.
3. Fortify your saving with coupons, cash-back deals and more
Along with clipping coupons for groceries and other purchases, tap into cash-back savings on apps like Ibotta, Checkout 51 and SPENT, which offers up to 25-percent cash back on your favorite brands; use in-store apps like Target’s Cartwheel; cut costs on activities with daily deals; identify days and nights that offer the best dis-counts on whatever you plan to buy (like BOGO free meals at restaurants, for ex-ample); and plan clothes-shopping trips around major sales paired with loyalty points and discounts. I often pay pennies on the dollar because of my dedication to saving money, and you can too if you make it part of your routine.
4. Avoid keeping credit balances
Credit cards are your friend when you know how to use them responsibly. They’ll help you build a respectable credit score when you swipe and pay on time and over the minimum (ideally closing out balances each month), but they also can rip you a new one if you’re spending more than you can pay for.
“Many people get into a bad habit of using credit to buy things, or to maintain a lifestyle,” says Jeff White, finance writer at Fit Small Business. “In many cases, these habits are created soon after graduation because of the credit card offers out there for new grads that have secured jobs. While having credit accounts can benefit your borrowing position and total credit score, keeping balances on them will not help you. Use credit cards, but make sure you’re using them as part of your budget and pay them off each month.”
5. Refinance your student loans
Most new grads have student loans, but they’ll be more manageable – and seem like a less of a burden – if you refinance as soon as possible.
“Refinancing your loans is one of the best options to pay off your student loans faster and more cost-efficiently,” says Carla Dearing, CEO of SUM180, an online fi-nancial wellness service designed to make financial planning simple and affordable. “When you refinance your student loans, you’ll have one consolidated loan with a single monthly payment and a lower interest rate, which is important as more of each payment goes toward paying down the balanced owed. Companies like So-cialFinance (SoFi) have a strong refinancing offering.”
For more ideas, check out Student Loan Hero’s The Ultimate Guide to Paying Off Student Loans Faster.
6. Keep your health care in check
You should not forgo health insurance for _any_ reason. One little trip to the hospi-tal can put you in debt, but it can be avoided. Right now you’re covered under your parents’ family health insurance plans until your 26th birthday. That works for some recent grads but not all. If you’re moving or planning to live in a city that doesn’t have the same network coverage as your parents, it may make sense to buy your own coverage to keep costs down. eHealth, a leading private online health insurance exchange, provides tips online on how to navigate this tricky fact of life, including how to enroll in health insurance, short-term health coverage, and financial assistance resources.
7. Create the savings plan that makes the most financial sense for your per-sonal situation
Try to save wherever you can (like putting money into an emergency fund) but when you’re on a budget it’s important to focus on the present. Pay your monthly student loan bill first then stash a little. That 401k can wait a bit if you’re already stretched thin. You’ll get there eventually, but you don’t want to dig a deeper debt hole with missed payments and late fees in the meantime.
8. Learn the difference between good debt and bad debt
Various debts you carry have different implications. TopCashback’s personal fi-nance expert Natasha Rachel Smith explains.
“Good debt is an investment that has the potential to grow in value or can generate long-term income,” she says. “Well-negotiated car loans/payments, mortgages and low-rate student loans is considered good debt. It is perfectly OK to accrue debt when it is good debt. Bad debt involves purchases that quickly lose their value or do not generate income. High-rate debts, frivolous spending and credit cards with high-interest rates are bad debt. You want to avoid accruing bad debt, as it could severely impact your credit score. Focus on paying your long-term good debt and minimize your bad debt.”
9. Stop letting social media fill your head with lies about the life you think you deserve
Life doesn’t come easy to those who are independent and work hard for whatever they have. That in mind, you’re doing yourself a huge disservice by comparing you life to that of others. Keep dreaming and setting goals for yourself – whatever they may be – but don’t let your success depend on what you have or don’t have, espe-cially when you don’t have it. Beating yourself up about a financial situation that you can’t snap your fingers to improve will only stress you out while crushing your motivation to keep climbing.
Mikey Rox is an award-winning journalist and LGBT lifestyle expert whose work has been published in more than 100 outlets across the world. He spends his time writing from the beach with his dog Jaxon. Connect with Mikey on Twitter @mikeyrox.\