Financial Tips for New College Graduates

This blog post was written as part of a sponsored program for State Farm®. All views expressed are entirely my own.

While in my mid 20s, I decided to enroll in college and pursue a business degree. I was a mother of two young children, working a demanding full-time job while managing the home. Although we were a two-income household, money was very tight. It took me several years to complete my studies, but I eventually graduated with honors. Although I was excited to be the first college graduate in my family, I wasn’t thrilled about the student loan debt I had accumulated.

This past weekend, I had the privilege of watching my daughter graduate from high school. It was an exciting day for our family, but also a bittersweet moment since my daughter will be heading off to college soon. I’m excited for this new chapter in my daughter’s life; however, I want her to understand that the decisions she makes now and as a college student, can impact her future.

If you’re a new college graduate, there are steps you can take to help reach your financial goals. Here are some of my favorites:

Create a budget

It doesn’t matter if you don’t have a lot of expenses, or if your income is limited. Creating a budget will help you track where your money is going, and where you should cut back. A budget doesn’t have to be overly complicated; simply calculate your monthly income and deduct your monthly expenses. If you wind up in the negative, you’ll need to either eliminate expenses or increase your income. If you would like an in-depth explanation on how to create a budget check out 5 Steps to Creating a Budget.

When you create a budget, it’s important to think about an emergency fund, too. Most financial experts recommend setting aside enough money to cover unexpected expenses for at least three to six months.

Live beneath your means

Many college graduates have to face the brutal reality of paying back student loans. Now is a great time to think about reducing your monthly expenses. Figure out your long-term financial goals, create an actionable plan, and start working on paying off your debt. Here are some simple steps you can take now to help get started:

• Meal plan based on grocery sales, use coupons and cook from scratch.
• Replace cable with an inexpensive streaming service.
• Drive a used car to avoid or reduce car payments.
• Live in a smaller home to lower housing expenses.
• Contact your utility companies and ask if you can negotiate your current rates.
• Shop for clothing and furniture at thrift stores.

Get creative

Saving money and living frugally doesn’t mean you can’t enjoy yourself. During this time of financial transition, figure out ways to have fun without busting your budget. Check out local venues and parks that offer free admission. Invite friends over for a potluck dinner instead of going out to eat. If you still need cash to pay for activities, consider selling excess clutter to help fund your experiences. You don’t have to go into debt in order to have fun.

Consider the future

The decisions that you make after graduation will impact your financial future. Will you be purchasing a home? Starting a business? You’ll need to create a plan to help reach your goals. If you have private student loan debt, you also may want to consider purchasing life insurance. This will enable your cosigner to pay off your debt in the unfortunate event that something would happen to you. A State Farm agent can help you determine the level of coverage that’s right for you. I also suggest reading the article 5 Financial Goals for Young Adults-for additional financial tips.

Are you the parent of a college graduate? What financial advice did you give them? I’d love to hear from you!

This blog post was written as part of a sponsored program for State Farm. All views expressed are entirely my own.