Life After College: Quick Tips For Recent Grads

There are many challenges that face today’s recent grads – living accommodations and financial issues are some of them. Here are some quick tips for finding a place to live, figuring out your roommate situation, and managing your finances:

Finding A Place To Live

One of the biggest initial decisions that you will make is about where you will live. Many students find that going back home is the most affordable (and perhaps only option) until some money can be saved up to go out on their own. If you’re able to find your own housing, make sure you have a budget. Figure out how much money you’ll have coming in with each paycheck (after taxes and other deductions), how frequently you’ll be paid and how much you’ll need to spend on other expenses. Most companies spell out how much you will be paid in a formal offer letter. If this information is unclear, make sure you ask your recruiter or contact at the company for some additional details. The offer letter should have your salary or hourly wages listed before taxes are taken out. This is an important distinction, as you’ll quickly learn that a good percentage of your earnings go to the government for taxes, and Medicare. Additionally, your employer may make pre-tax deductions from your paycheck to cover health insurance premiums and retirement plan contributions.

Live Alone Or Find A Roommate?

If you lived away from home during college, you may already be familiar with having a roommate. If you can tolerate it, having a roommate or two can dramatically help in cutting initial housing costs. It’s best to select roommates who have similar ambitions and career goals. It can be a recipe for disaster if you move in with someone who likes to have parties all night and you have to be at work at 7 a.m. Living with someone else is a serious commitment, so make sure you ask your prospective roommates plenty of questions before signing a lease. Landlords and property management companies don’t have to let you out of a lease if your roommates don’t work out. Save yourself an expensive consequence, and a lot of headaches and frustration by doing your homework before agreeing to move in with someone. You should consider your own personal habits that may be annoying to other people, as well as asking questions about your prospective roommate’s cleanliness, noise, work schedule, thoughts on having parties and guests over during the work week, and any other topic that you feel needs to be discussed.

Living Expenses

Your rent payment will most likely be the largest expense you have each month. In addition to rent, other monthly expenses include gas for your vehicle, groceries/food expenses, car payments, and incidentals. Many students also leave school with the burden of hefty student loans. In most cases, these loans need to be repaid starting soon after your education is complete. Make sure you understand the terms of the loan and the repayment schedule. A student loan is very similar to a mortgage in that your failure to pay on time can adversely impact your credit score for many years going forward. Defaulting on a student loan is a terrible idea, so be sure to take your repayment responsibilities seriously. If possible, try to save a little each paycheck in case something unexpected comes up. As you advance in your career, many financial advisors recommend having six-month’s salary in your savings account. This is hard to imagine when you’re first starting out, but you’ll be amazed at how quickly you can build a “rainy day” fund by just saving Rs 1000 - Rs 3000 per month. Retirement may seem VERY far away, but try to put a little money into your retirement fund. People who start saving in their early 20’s are much better off than those who wait until age 30 or later. If your employer offers a rupee-for-rupee match, try to take advantage of that “free money.” Your company’s human resources department should be able to explain what benefits are available and how you can maximize your retirement savings. When you’re planning for your initial housing expenses, also consider if you’ll need to purchase furniture. Check with friends and family members to see if they have any items that they would be willing to donate. If not, try to find used items and items on sale to help reduce your costs. If you plan on cooking, you’ll also need to obtain a basic set of pots and pans, dishes, flatware, and cooking utensils. You will also need linens and towels for your bedroom and bathroom. It’s not much fun to live paycheck to paycheck, so try to find accommodations that will fit within your means. With good planning, you can still have a little money left over for incidentals and social events.