Graduation is an exciting time, it marks a huge accomplishment, it also marks a huge transition from full-time student to full-time adult. Here are 8 things to know after you graduate.
1. Your Student Loans Have a Grace Period
Take advantage of this post graduate time, do not use it to be in denial about your student loans. Start getting serious about your money now. Start learning to budget, it will allow you to get ahead on your money. Figure out what payment plans are available to you.
Then estimate what your payment will be, instead of making that payment, put it in a savings account. This can be the beginning of your emergency fund. I wrote an entire post on how to take advantage of your grace period, you can read about it here.
2. Understand Your Student Loan Repayment Options
There are lots of different repayment options out there depending on the type of student loans you have. This is especially true for federal loans, though there may not be as many options available for private loans but take the time to talk to your loan provider and find out.
Keep in mind that while an income-based repayment plan may make the most sense now, if your payment won’t cover the interest that accumulates each month, then the amount you owe will actually grow. Potentially culminating in a huge tax bill 20-25 years from now.
If you have private loans consider refinancing for a better rate. I recently refinanced one of my loans is SoFi and it turned out to be one of the best decisions I’ve made. If you are interested in refinancing student loans with SoFi, you can use my link and earn a $100 bonus.
3. Understand The Benefits at Your 9-5 Job
There are some serious perks when moving from graduate to 9-5 worker. Be it an employer contribution to your 401k, health insurance, or paid time off. Know what your options are and take full advantage. For your retirement options, make sure you understand how the benefit is structured, including the vesting schedule.
Vesting schedule means, when the money becomes yours, typically the employer’s contribution won’t become yours until you’ve worked there a specified amount of time.
Make sure with your insurance options, you understand what your deductible is and what you are responsible for. Different plans offer HSA and FSA to help with health expenses. Use all of your paid time off, it is your time do not let it go to waste. Make sure you understand any restrictions on using the time.
For example, do you just have a pile of days off to count for sick days and vacation? Or do you have separate sick days and paid time off? Don’t give anyone your time for free, no matter how much you love your job.
4. Nothing is Set in Stone
The number of decisions you have to make after you graduate can be overwhelming, but it can be comforting to know that most of the decisions you make aren’t permanent. Maybe you end up taking a job you are less than thrilled about? You don’t have to work there forever, you can accept the job and continue to look for a new job.
SO even if you have to make a decision you aren’t 100% happy with, it is ok, you can change it later. Be smart about decisions but don’t worry too much if they don’t work out.
5. Relationships Take Effort
After you graduate, getting together with friends can take more of an effort. You all likely don’t live as close to each other anymore, your schedules may be different too. It isn’t the end of the world, though you’ll quickly learn which of your friends is willing to put in the effort to your relationship and which ones will drift.
But note that the drifting isn’t necessarily permanent (see #4 above), sometimes it just takes some time away to figure ish out and then reconnecting later. Support doesn’t have to mean meeting up once a week or a month, it can be being there when they are ready.
6. Realize the Difference Between Needs & Wants
You may WANT an apartment on your own, but you NEED roommates to afford an apartment. I promise that if you really do want to live without roommates, eventually you will get there. It just takes some time. Knowing the difference between want and need will have a huge impact on your finances and allow you to make more progress on those student loans.
If you can’t financially afford it, then wants need to go to the wayside. Do not dig yourself into a financial hole for a “want”.
7. Moving Home Isn’t the Worst That Could Happen
It will be more embarrassing to move back home in your thirties than it will in your twenties. If it makes the most financial sense and your parents are willing to let you move back home after you graduate, why not? It is not embarrassing or even out of the ordinary these days, going from college to the “real world” is an adjustment and taking some time to get a handle on your finances and making that easier by living at home is understandable.
Big props to the understanding parents, letting the “kids” move back home after they graduate. Even if it is just for a couple months, it doesn’t have to be for years.
8. Learn How to Budget
Budgeting is clutch to knowing what is going on with your money. Again, I wrote an entire post on this, check it out. Budgeting not only tells you where you are planning to put your money but also where it actually goes, because successful budgeting includes tracking your money.
The sooner you get on top of your finances with a budget of some sort, then the better off you’ll be. The sooner you’ll be out of debt, living without roommates, and taking exotic trips. The sooner you can do it the better.
If you can figure out a budget after you graduate, during your grace period, you’ll be golden. There are lots of different tools out there that can help. YNAB for example, I believe has a version of YNAB that they give to college students for free (so if you are still student grab the free version!). There are lots of other tools out there for budgeting and paying down debt.
Wrapping it Up with a Bow on Top
Transitioning from full-time student to full-time adult may not be easy, but there are a lot of perks that come with the switch. You probably won’t have all the answers right away and that is ok, give yourself a break. Take it all as one thing at a time.
Once again congratulations on Graduating! For those that graduated a while ago, anything else you think graduates should know?