- What recent college graduates can do to put themselves in position to succeed financially
- How to know where you stand financially
- Why developing a spending plan is a process, not an event
- Why having a map when you are trying to get out of debt is extremely important
- Quote of the lesson from Karl Pearson
This time of the year is graduation season. I love coaching with people in the life stage because it is an important time in their life and they are full of energy and questions and are also very teachable.
Today’s lesson we are going to be discussing the three things that recent college graduates can do to take control of their finances. The good news is that even if you aren’t a recent college graduates, these three things still apply to your situation.
For college graduates however, it is a little different in that transitioning from college to the “real world” is a tough process. Not are you dealing with money, most likely, for the first time in your life, you are also transitioning to word life. This includes working Monday through Friday, shifting your body clock and time schedule, as well as working with the same people everyday instead of getting a fresh start every semester.
But in order below are the three things recent college graduates should do to get a good control of their money:
- Know where you stand financially
- Develop a Spending Plan
- Debt Snowball
Know where you stand financially
A lot of times we can’t get anywhere because we don’t know where we are. So knowing where we stand financially gives us a snapshot of our current financial situation.
As a recent college graduate this might not look pretty and in fact it can be also really eye opening. Which is a good thing. But knowing where we stand will help guide and motivate us through the things we are going to talk about next.
For more information on knowing where you stand financially please check out:
Develop a Spending Plan
After knowing where you stand, it is time to develop a spending plan. The good news is that a spending plan is something you get to control, so if you think it is too restrictive then guess what? You can always change it!
If you don’t make much money it’s still important to do one. You might think you’ll do it later when you make more money, but I’ve found that it is important to develop the budgeting muscle a soon as you start making money. That way you do start to earn more you are less likely to get sucked up in the lifestyle inflation trap.
Now with a spending plan you might not have enough money to do everything you want to. But if you develop and stick to one it will ensure that you get to spend money on the things that are most important to you.
For more information on developing a spending plan please check out:
If you are trying to get somewhere new for the first time and you don’t have a map, you’re just guessing on how to get there.
That is often how we are with our debt, we want to get out but we have no idea what direction we need to take.
The debt snowball is simply listing all your debts smallest to largest. But in addition to listing them out, you are also labeling how much the monthly minimum payment is, the interest rate, and the lender. This gives you a list of all your debts and from there you can decide on which debt to attack first.
I personally recommend paying off the smallest debt first, but whatever way you decide to pay off your debt I do recommend to focus on just one debt at a time. That intensity and focus on one debt at a time will take you really far.
For more information on setting up your debt snowball please check out:
- Is it more important to spend less or make more when getting out of debt
- Best way to pay off our debt
- Debt snowball spreadsheet
If you are a recent graduate and would like someone to walk with you and teach, encourage, and show you how to do all of these things and more, please fill out the financial overview form. We can then work out a time to get together and see if we’d be a good fit working together.
Today’s quote of the lesson is brought to you by my book on buying a house titled “A Tale of Two Houses”
“That which is measured, improves” – Karl Pearson
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