Today I met Jenna. Jenna is one of the sweetest girls I have ever met. She recently graduated from Law School, set up shop and hung her shingle out front. Currently she is taking on any and all clients….including being the liaison for mortgage companies.
During our conversation I found out that she really has no idea what to do. Now, I don’t mean about working…that part she has figured out. What I mean is….college did not teach Jenna how to be an adult. She learned all of the skills that she needed to pass her Bar Exam.
But what about life skills?
Like, how to change a tire. How to find the perfect spouse. Or…how to save money. How to spend money. How to plan for the future. In fact, she really has NO idea how to balance a checkbook. What?! I know, crazy huh?
So, how does she even begin to navigate finances as a college graduate? How much should she put in her 401K? Should she pay extra on her student loans and if she should, how much? What about saving? Where does she even begin?
So, what should Jenna do on the financial end? Right now. How should she navigate the waters of student debt, saving, spending and her financial future? Not counting getting married and having kids and everything that goes with that, including the delicate balance of work and home.
I mentioned that I used to be a Budget Counselor and could definitely help her navigate all of those financial matters. But before she even begins with the financial part I would recommend that Jenna spend some time creating some goals.
I have a recent post ‘How to Want From a Place of Abundance.' Start there. Because the thought process inside that post just might be life changing
What about you? How should you begin to navigate ‘life' outside of college?
Start with 2 lists. What should those lists include?
1. Dreams – Write down everything that you would LOVE to do in your lifetime. Dream BIG. Don't put qualifiers on anything. Pretend that anything is possible and that money is a non factor.
Separate that list into categories. Vacations. Business. Relational. Family.
2. Goals – Once you have your dreams on paper, it is time to take those dreams and come up with a plan to achieve those dreams.
Let's say that you want to travel extensively (DREAM) but have student debt to pay off. Your goal would be to pay off that debt as soon as possible so you can begin to save for your travel.
Or, maybe one of your dreams is to own a home. In order to qualify for a mortgage you need to pay down that student debt (goal).
Or maybe your dreams have nothing to do with money. You want to get married. Have kids. Your goals will be geared towards achieving that dream.
So, how do you manage money/start a budget as a college graduate?
Now that you have established your dreams and goals…it is time to focus on the financial end of ‘living' as a college grad.
Keep track of all your spending. Cash, credit card, checking account, debit card – ALL spending.
Separate that spending into categories: Utilities, food, gas, rent, loan payments, entertainment, clothes, personal, vacation, tithe, savings, etc.
Set up a budget. No idea how? I got ya covered. I have a bunch of budget posts just for YOU!
Increase your savings to a minimum of 10% as you earn more money. You should always pay yourself 1st.
After you determine what your fixed costs are (rent, insurance, loans) make adjustments to your variable expenses (food, clothes, eating out, hair & nails, etc). so that you have extra.