How To Not Suck At Making The Transition From School To The Real World

All around the country, people who’ve never had a full-time job or paid their own way are going to be pushed out of safe bosom of school. Maybe you’re one of them. Well, now that you’re done with your cap and gown and you have a diploma in your hand, it’s time to join the rest of us in the real world.

The good news: This transition will give you lots of freedom. The not-so-good news: It will also give you many money challenges.

Get started on the right foot and have a plan.

Here’s how to not suck at transitioning from college to the real world.

Get a job, any job

No matter what kind of degree you have, you need a job. Even if you have no idea what you want to do with the rest of your life, you need cash. We know this isn’t always easy, and you probably won’t find your dream job right after graduation.

Even if you have to resort to flipping burgers, that’s still a job that pays actual money and it’s important to start your life as a grown up with income. Perhaps you can find a job with flexible hours that will allow you to go on more interviews for jobs in your field. Plus, prospective employers will see that you’re not just loafing around.

If nothing else, having some income will allow you to get on track with a budget and learn how to pay your own way — even if it’s just keeping up with student loans and giving your parental landlords some financial payback for taking you back into their home.

Create a budget

Whether you’ve started your first real job or you’re still looking, you need to carefully consider how you spend your money. Start by tracking every nickel you spend so you can see where your money is going.

Let’s say you’re living with your parents rent-free, but you hope to get an apartment of your own someday. You should create a line-item on your budget that represents what you’d pay in rent if you moved out, and you should pay that to a savings account each month. It will help you get used to paying the rent, and you’ll build a cash cushion to use for future expenses.

When you finally do rent, don’t forget about renter’s insurance.

Pay bills on time… No, seriously

You may have gotten away with handing in your Advanced German Literature term paper late, but your creditors won’t be so lenient.

Paying your bills on time — even if you can’t pay them in full — is one of the most important actions you can take to build a positive credit history. Meanwhile, failure to keep up with your bills is an easy way to get off on the wrong foot, financially speaking.

If you ever find an error on your credit report, make sure to get it fixed.

Live within your means

Some of your friends may have gotten higher-paying jobs, and it’s understandable if you’re a little jealous while they’re enjoying their new incomes by spending it on clothes, dining out and maybe even buying a snazzy new car.

Things are not always as they seem.

We’re willing to bet many of them are spending more than they earn as they try to make up for the lean college years (or try to impress others without thinking of the long-term consequences of debt).

Don’t make that mistake. If you’re like the average graduate, you have lots of debt already.

A recent survey found more than 75% of renters between the ages of 18 and 24 spent more than they earned each month.

Another study [PDF] found that 2013 college graduates walked away with an average of $35,200 in college debt and an average of $3,000 in credit card debt, too.

Don’t add to your personal money burden by going hog wild at happy hour with $15 cocktails.

If you’ve already accumulated significant debt, here’s how you can get out.

Build a cushion

When you start bringing in some cash, come up with a plan for the future. Build a list of goals and determine how you’ll be able to reach them. You’ll need to balance your short-term expenses, such as food and transportation costs, with the need to save for longer-term goals, such as for a rent deposit, a down payment on a car and more.

But before you can save for long-term goals, you need to plan for emergencies. Financial advisors recommend you have between three and six months of expenses in a bank account that you don’t touch unless it’s absolutely necessary. It’s not sexy, but this is the first place you should save.

Pay yourself first

The easiest way to save is to pay yourself first, and putting savings on auto-pilot will increase your chances for success.

Set it up so that certain amounts of money come out of your paycheck automatically — before it’s deposited into your checking account and you have a chance to spend it.

You can have small amounts redirected to a bank account for your emergency fund, and also to other accounts that are earmarked for your other goals.

Also make sure to get started early with retirement savings, especially if your employer offers a 401(k) plan. Yes, retirement is many years away, but studies show if you start early, you’ll have a larger nest egg than those who start later — even if you’re saving a smaller amount. (Learn more about retirement savings options here.)

In case you haven’t figured it out yet, there are some major differences between college and the real world.

Before you go running back to the welcoming, familiar embrace of another degree and more student loan debt, try being a sensible adult in the real world for a while; it’s better than it sounds.

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You can read Karin Price Mueller’s stories for The Star-Ledger at, follow her on Facebook, and on Twitter @kpmueller.

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