Graduating from college is an exciting and sometimes unnerving time. Why? Entering the work force brings happy changes (like a regular paycheck!) but a lot of financial responsibilities. Some expenses are expected—like rent, but others can seem to come out of left field. College grads can take note of these tips to avoid unpleasant financial surprises.
First, when you create your budget, don’t forget about taxes. For example, if your first job pays $30,000 a year, you can’t budget based off of that number. Taxes will take a significant bite out of your take home pay, so factor that into your “real” budget.
Similarly, when you were in college you likely had most medical expenses covered. But when you enter the work force, you’ll probably have to start paying for some of your own health insurance. At the very least, you’re likely to have out of pocket expenses for visits to the doctor. So as you’re job hunting, remember to consider not only your salary, but also the overall benefits package.
Finally, when you were in college, most things you needed were probably located on or near campus. This might not be the case when you move into your own place—so be sure to plan for transportation-related expenses. As you’re deciding where you want to live, factor in convenient access to public transportation. If you decide you need a car, consider buying a used car instead of a brand new one. And of course, don’t forget to include the cost of gas, insurance, and maintenance.
With a little planning, you’ll have a smooth transition from college life to adult life.
Congrats to all of our college graduates this year!
The information on this page is provided for educational purposes only and is not tax, legal, financial planning or investment advice. Neither the information nor any opinion expressed in this section constitutes an offer to buy or sell any securities or advisory products. The information provided is general and is not information reasonably sufficient upon which to base an investment decision and should not be considered a recommendation to purchase or sell any particular security. You should not regard this information as a substitute for the exercise of your own judgment. Investing involves risk.