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4 Money Lessons I Had to Learn After College, & You Probably Should Too

No one likes to think about all the money they’re spending, that’s just a fact of life. However, it’s extremely important for you to know just how much money you have coming in and how much of that is going to your monthly expenses. Are you paying your bills on time? What about your student loans? Have you thought about opening a savings account post-grad? These are all valid questions you need to ask regarding your finances – and they’re also just the beginning to mastering money after college.

College students all over the world know just how hard it can be to manage finances after graduation, so I put together a list of four money lessons I (and a few other graduates) have learned in the real world so far.

1. Start a savings account, and start it early.

If there’s one piece of advice all college grads can agree on, it’s that you need to have a savings account. I’ve had a savings account since I graduated high school, opting to put back most of the money I was gifted instead of spending it. While my savings isn’t perfect or even close to where I want it to be, I do feel ahead of the game. But don’t fret! It’s totally okay if you didn’t start one in college, not everyone does. But you’re going to find a better return from your savings if you start it earlier post-grad.

“Put money aside for separate and specific funds,” Molly Pearson, a 2017 graduate of Queens University of Charlotte, says. “Car stuff, savings, rent or a new place to live, emergency money, etc.” With multiple big life expenses you’ll want to plan for, having a savings account is the perfect place to set aside part of your monthly paycheck for those things.

Leslie Tayne, a debt resolution attorney and author, told Her Campus that automating your savings and putting large lump sums of money into your savings account can both be super helpful in increasing your numbers. If you can, automating your savings takes away the pressure of putting money back on your own. “It’s a great way to keep yourself on track with your savings goals,” she says.

If you can’t automate your savings, which means to set up an automatic withdrawal and deposit into your savings account each month or weekly, think about putting your tax returns or gifts into your savings account.

At the end of the day, any amount of money put aside will be helpful to have down the road. You never know when there’s going to be an emergency, or when you’ll be at a place in life to get to make one of those big purchases!

2. Pay off your debt right away.

Most college grads have some kind of debt that they need to pay off. Whether that’s those pesky student loans that you brushed aside for four years or the credit card debt that’s been slowly accumulating for a few months, there’s likely something that needs attention to keep your credit in good standing.  

There are multiple ways to tackle whatever debt you have, but there are two methods that really stood out when I asked around: the snowball and avalanche methods.

Christian Stewart Barnes, founder and lead financial coach at Do Better Financial, told Her Campus about the snowball method. “Write your debts down smallest to largest, make minimum payments on everything, throw any extra money at the smallest debt until it’s gone, then rinse and repeat for each debt as needed,” she says. Barnes points out that seeing the debts drop can keep you motivated.

The avalanche method, however, is slightly different. With the avalanche method, you’re going to pay back the loans with the highest interest rate before you tackle the lower rates. Since higher interest rates add up more quickly, this method ensures that you pay as little interest as possible on your loans (and that’s a good thing). Interest adds to the principal balance, which is the amount you originally borrowed.

No matter what you choose to do to pay off your loans, make sure have a plan in place, know what you owe, and pay on time. As long as you’re making payments on time, the rest will be smooth sailing.

Related: 6 Tips to Managing Your Money After Graduation

3. Create a budget and stick to it.

You’ve heard it before, but now you’re going to hear it from me: Budgeting is key. “It’s so easy to swipe a credit card and not blink an eye,” Rebecca Gramuglia, personal finance expert at TopCashback told Her Campus. “but it’s important to make the most of your take-home income by spending wisely.”

Specifically, Gramuglia recommends the 50/20/30 rule for budgeting out your paychecks. With this system, you allocate half of your paycheck to your bills and other essentials for the week (or month, depending on your pay periods). You can put back 30 percent of your check for fun things and the other 20 percent should be put into savings. While the system recommends 20 percent going to savings, I would personally opt to put back the 30 percent. The more going back, the better. This allows you to make sure everything’s taken care of.  

Apps such as Mint, Digit and Charlie can be super helpful while you’re learning to budget on your own (or even once you’ve created your budget). Mint helps you budget by tracking your bills, checking your credit and alerting you if something seems fishy. The app is available on iOS and Android. Digit is similar, but it’s more focused on helping you save money. Digit analyzes what you’re spending and then saves the perfect amount every day. You don’t have to stress about doing the math yourself with this app. Another option is Charlie, the “money-saving prodigy penguin.” Instead of downloading an app, Charlie sends you text messages with tips and tricks to help you go farther with your money.

If using apps isn’t your cup of tea, you could also use a more hands-on method. Chyna Blackmon, a 2018 graduate from Queens University of Charlotte, makes a physical budget. “I made a Google spreadsheet that I set to configure how much I should save or spend for things that have to be paid,” she says. As long as you know what needs to be paid and when, you’re as prepared as you can be. You just have to make it happen. 

4. Don’t sweat the mistakes (but do learn from them).

As a recent graduate myself, and as someone who watched her family struggle with money for many years (and still to this day), I know how scary all of this is. Debt, bills, budgeting – it’s a lot to handle. The best advice that I can give you is to accept the fact that you’re going to mess up sometimes. The trick is to not let it bring you down and to learn from it.

“If you’re in the midst of a postgrad transition, or about to start one,” Gramuglia says, “know that it’s a time of change—and mistakes will be made. For a while, it might seem like a never-ending period of trial and error, and that’s fine.”

When it comes down to it, money is complicated. It’s all right to ask for help and to seek advice from those who have more expertise than you.  And don’t stress if it looks like your fellow peers are doing better than you are. “Everyone is at a different pace after college,” says Justine Saunders, who graduated from Queens University of Charlotte in 2016 and is currently a teacher. “Don’t compare yourself.”

Saunders also advises that you set timelines for yourself but remember that life can have unexpected situations.

Your adult finances can be complex, but they are also very manageable. Just remember to start as early as you can, and don’t be afraid to ask for help. Chances are, anyone you ask has been where you are right now.

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Katie is a Contributing Writer for Her Campus and works retail to pay the bills. She loves all things creative but has a specific love for writing and photography. She hopes to one day find the inspiration to write a book but, in the meantime, likes to write about life after college, traveling, entertainment, and the people who create things (and what they create).