Making the transition from Student to tax-paying citizen in a financially-sound way.
Graduating college and university is a great feeling. Your hard work, sacrifices, and commitment are finally being credited, and now you can move on to the next chapter of your life: work. How exciting will it be to actually have money in the bank account, a full apartment or house to yourself and a more regular schedule?
The transition between student life and professional life theoretically should be easy- you are moving “up” the socioeconomic ladder and you can afford things that you couldn’t before. However, it is easy for these graduates to overestimate how much they are making and the quality of life that they think they can achieve at their pay level. You don’t have to look far to find these young professionals, that instead of making payments on their student loans, are indulging in expensive habits like fine dining, luxury condo living, and trips to exotic destinations.
After a few months, reality hits the recent grads like concrete- though they could afford more than before, they can’t support the lifestyle that they are currently living. What’s more, they seem to be in even more debt because the interest on their student loans is building up. Now what? How does one avoid or get out of this predicament?
- Continue living the student life for a while longer
Though you might be itching to get an apartment on your own or start shopping at some higher-end stores, trick yourself into thinking you are still on a student budget. This gives you a chance to put a dent in your student loans before you start taking on more expenses. Getting into the student mindset is difficult once you have already left it, so this is really more of a mitigating measure than a solution to a panicking young professional.
- Construct a Budget
In your student years you might have not thought much about your budget and all the expenses that you have. Now you will have some “grownup” expenses like insurance, transportation, mandatory work functions, rent, utilities and more. Put your math skills to the test and calculate your incoming funds against your outgoing expenses on a monthly basis. This exercise will give you an idea of how much your current lifestyle costs and how you can adjust it.
- Increase your means
This is the most difficult way of fixing this problem and definitely comes with a limit. If the cost of your life exceeds that of your means, a solution might be as simple as increasing your means. Whether that means looking for a new job or taking on extra shifts, it all depends on the nature of your industry. However, don’t repeat the mistake of increasing the level of your life again. The point is to keep that constant and just increase your income to match it.
Now some will have gone pretty far down the rabbit hole, and though want to make some of the above changes, have looming payments that have to be dealt with first. No credit check loans can relieve your financial worries in the short term, but along with that you need a sound game plan for the long term. If necessary, approach a trusted individual with knowledge of finances or a financial professional.
The time of graduation is full of excitement, with first jobs, big moves, and a chance for a steady income. Do yourself a favor and take a reality check along with that pay cheque- that’s how you graduate from being a student to being a true young, successful professional.