How do you prepare financially after college?

Now that's it graduating season of the year, tuck in useful insights below for a fresh grad friend you know in preparing him financially after school.

These can very well apply too to young professionals who have just started working (or are working for few years now).

Going fresh out of college was an ecstatic feeling during my turn. "Finally, I'm in control of my life!"
But I soon realized the new set of issues every young man encounters in that phase of one's life - which I believe rests primarily on deciding for yourself the life that you want to have. You make your own rules, your own drive, your own roadmap, without the teachers who were once showing us that single one direction everyone takes.

It wasn't easy.
There were certainly lots of expectation from society, school and of course, family. And it didn't take me long before I realized how properly managing my finances is so critical in my plan to be "more free" in doing the things I should be focusing on in life - a cause I can eternally attach myself with. And so this blog, in some way, was born out of that desire.

How about you? What are your realizations with few years of working experience under your belt after that glorious moment of graduation? Hope this lights a bulb over your head.

Happy Labor Day!
May God, the first laborer, bless the fruits of your hands!
Have fun investing (with you and your money working)!
- Omeng

 ***HOW DO YOU PREPARE FINANCIALLY AFTER COLLEGE -
Source: K. Mercadante, Moneycrashers

With all that you learned in college, it’s a good bet that personal finance wasn’t part of the agenda. It’s a shame because how you manage your finances – especially in the next few crucial years – may be every bit as important as what you do in your career.

Now is the time to make most of the important money decisions in your life. And most of these are habits that need to be initiated and nurtured now when you’re just starting out. How successful you are in embracing good money habits will go a long way towards determining what kind of future you’ll have. Here are the most prudent things to do after graduation -

1. DON'T BUY A NEW CAR - One of the first “must haves” on any college graduate’s list is a new car, but it can be one of the biggest mistakes if it’s purchased mostly with debt.
It’s better to buy a decent used car – with a large down payment – and keep the monthly payments as low as possible, at least until your job and income are more stable and the debt hangover from college is well under control.

2. DON'T BUY A HOUSE - Buying a home and investing in real estate will have it’s time in your life, but there’s no need to do it right out of school. For one thing, owning a home generally costs more than renting (i.e. renting vs. buying a home). But perhaps more important is that you’re in a transitional phase coming out of college and owning a home could mean less job mobility. Wait until your life becomes more settled and your future direction is clear. In the meantime, find a cheap apartment for rent and keep your options open.

3. START BUILDING AN EMERGENCY FUND - Saving money is the basic foundation of financial success, but it’s often thought of as something that can be done later in life. The problem with that way of thinking is that saving is a habit, and the earlier it’s developed the better. Start saving when you’re 21 or 22, and you may have a nice bankroll by the time you’re 25 or 30. Additionally, having savings readily available helps to avoid tapping into credit cards any time money is short.

4. AVOID USING CREDIT CARDS - Young adults can be more susceptible to the attractions of credit cards than most. The combination of unbridled optimism with the need for so much stuff can get you buried deep in outsized balances in no time at all. Credit cards are a vicious cycle, because of the revolving term and the fact that it’s so easy to charge when money is tight. And interest charges are added on while the process flows on.

The best way to deal with a credit card problem is to avoid getting into it in the first place. Pay for your purchases out of income or savings, and if there isn’t enough of either, don’t buy at all. Know the difference between needs and wants.

5. START FUNDING A RETIREMENT PLAN NOW - If you’re facing a large number of expenses – as many young people do when they’re starting out in life – this can be a tough one to swing, but one well worth doing. If you can’t put in much, don’t sweat it, put in as much as you can. A little is better than nothing at all.

Retirement savings are another one of those good habits, and small contributions made early in life can get you started on the right path. Because of compound earnings, the sooner you start this process, the better off you’ll be in the long run.

6. DON'T STOP LEARNING - The job market is more competitive than ever, and promises to be even more so in the future. The best way both to survive and to increase your future income stream is to invest in yourself and commit to continually learning and growing in your abilities. The more you know, the more you can do and the more valuable you will be to your employer or to future employers. Develop enough job skills and you may be paving the way to starting your own business.

If you’re a young adult starting fresh in life, you can choose to develop the habits of either a debtor or a saver. Which path you choose may be the most important money decision you’ll make in your life.

Do you have any other tips for new graduates starting out?

****

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